WASHINGTON/NEW YORK: President Donald Trump dismissed a senior Labor Department official on Friday, accusing her of manipulating jobs data without evidence. The move intensified worries about the reliability of federal economic reports.
In a separate development, Federal Reserve Governor Adriana Kugler unexpectedly announced her resignation, offering Trump an earlier-than-expected opportunity to reshape the central bank’s leadership. The twin announcements rattled markets, with the S&P 500 dropping 1.6%, its steepest fall in over two months.
Trump targeted Erika McEntarfer, a Biden appointee, claiming she falsified employment figures. No proof supports his allegations against the Bureau of Labor Statistics (BLS), which produces key economic indicators like jobs and inflation data. A BLS representative declined to comment.
The July jobs report showed only 73,000 new positions, with downward revisions erasing 258,000 previously reported jobs for May and June. “We need accurate Jobs Numbers,“ Trump posted on Truth Social, ordering McEntarfer’s immediate replacement.
A Trump administration official, speaking anonymously, cited dissatisfaction with recent data revisions and declining survey response rates. The BLS has scaled back data collection for inflation metrics due to resource constraints. Response rates for employment surveys fell from 80.3% in 2020 to 67.1% last month.
A Reuters poll revealed 89 of 100 policy experts worry about U.S. data quality, with many criticizing the lack of urgency in addressing issues. Reduced BLS staffing has also narrowed the scope of Consumer Price Index reporting, a critical inflation measure.
“Politicizing economic statistics is a self-defeating act,“ warned Michael Madowitz of the Roosevelt Institute. “Credibility is far easier to lose than rebuild.”
Meanwhile, Kugler’s departure lets Trump appoint a Fed governor ahead of schedule. The president has repeatedly clashed with Chair Jerome Powell over interest rates. Potential successors include Trump adviser Kevin Hassett and former Fed Governor Kevin Warsh.
“I would not read any political motivation into [Kugler’s] decision,“ said analyst Derek Tang. “But she’s calling Trump’s bluff by handing him a vacancy to fill.” – Reuters