When the U.S. President Dismisses the Labor Statistics Bureau Director for Political Reasons
Not only is this a personnel news story, but it is also a moment when policymakers are pushing the world’s largest economy into an unknown storm.
(Background: False Prosperity! U.S. non-farm employment in July far below expectations, with May and June revised down by 258,000 jobs; Trump lashes out at Powell and fires the Labor Bureau Director.)
(Context: Massacre! Bitcoin falls below $113,000, Ethereum drops below $3,500, and $1 billion is liquidated across the network.)
The U.S. Bureau of Labor Statistics (BLS) released the latest data on the evening of the 1st: the U.S. added only 73,000 non-farm jobs in July, far below the market expectation of 110,000. Additionally, the non-farm employment report revised the employment figures for May and June down to 19,000 and 14,000 respectively, a total downward revision of 258,000 positions, highlighting the weakness in the labor market, leading investors to seek safe havens, causing declines in both U.S. stocks and cryptocurrencies.
Trump’s Outrage Against Powell and the Labor Bureau Director
The non-farm data ignited President Trump’s dissatisfaction, as he launched fierce attacks on Federal Reserve Chairman Powell and Labor Statistics Bureau Director Erika McEntarfer on his social media platform, Truth Social.
“I just learned that our ’employment data’ is compiled by Biden-appointed Labor Statistics Bureau Director Dr. Erika McEntarfer, who is falsifying employment figures before the 2024 election in an attempt to boost Kamala Harris’s chances of winning. The Labor Bureau overestimated job growth by about 818,000 in March 2024, and again overestimated by 112,000 in August and September before the 2024 presidential election, setting a record—how could it be so absurdly wrong? We need accurate employment data. I have instructed my team to immediately fire this politically appointed official and replace her with someone more competent and qualified. Such important data must be fair and accurate, not manipulated for political purposes.”
She claims that only 73,000 jobs were added in July (shocking!), and more importantly, the data for the previous two months was revised down by 258,000. Similar situations have occurred in the first half of this year, always with negative adjustments…
When the Nation Loses the Ability to Sense the Storm
While it has not been confirmed whether Labor Statistics Bureau Director Erika McEntarfer will indeed be dismissed, Trump’s actions are creating a new, asymmetric systemic risk.
In the past, we worried about the economic storms themselves: recession, unemployment, inflation. But in the future, a more fundamental crisis is emerging: our policymakers no longer adjust directions based on objective data, but instead, they demand data that aligns with their pre-set directions.
When only 73,000 jobs were added in July, and the previous two months’ data were significantly revised down by 258,000, marking the worst quarterly performance since the pandemic, Trump’s narrative that “my tariff policy is bringing economic prosperity” conflicted with the data. His choice was not to reassess the policy but to eliminate the data publisher.
This could push the entire economy into a “blindness” state:
- How does the Federal Reserve set interest rates? If the credibility of inflation and employment data is shattered, Powell’s decisions may be viewed as political maneuvers.
- How does Congress formulate relief bills? If we cannot accurately measure the scale and depth of unemployment, any assistance may come too late or be misdirected.
- How do investors allocate capital? When official data becomes political propaganda, the market will be flooded with rumors and panic, and the flow of capital will no longer be based on value judgments but on political suspicions.
The Long-term Neglect Before the Collapse of Trust
On the other hand, over the past fifteen years, whether under Democratic or Republican rule, the budget of the U.S. Bureau of Labor Statistics has been severely cut under fiscal tightening pressures. According to a report in June of this year, the Trump administration’s budget proposal for Fiscal Year 2026 cuts the budget and personnel of the Labor Bureau by about 8%.
This may indirectly lead to a loss of many experienced statisticians, meaning fewer personnel for field surveys and fewer resources for quality control. The result is that the “revision values” of monthly employment reports have become increasingly large in recent years. This is not a conspiracy, but rather a lack of systemic energy, making preliminary estimated data less accurate and requiring more time for verification, leading to larger revisions.
Trump has cleverly utilized this. He repackaged the “data quality vulnerability” resulting from the agency’s resource shortages as a political conspiracy. In the past, questioning data was an internal debate about the rules, challenging the accuracy of the data.
But now, Trump’s attack is that “the data is fake,” which undermines the rules themselves and denies the legitimacy of the institution. This fatal blow could ignite decades of accumulated trust deficit all at once.
In the future, the market will be unable to distinguish: is it really the data that is problematic, or is it politically necessary for it to be problematic?
The Ghost of Yesterday in Argentina: When “Truth” Becomes the President’s Private Property
What happens when a country’s official data loses credibility? We don’t need to imagine; we can look at the ghost of yesterday in Argentina.
Between 2007 and 2015, Argentina’s official statistical agency INDEC systematically understated the actual inflation rate under political pressure. While official figures showed moderate inflation, the price increases felt by people in supermarkets were several times higher. The result was catastrophic:
Investors completely lost confidence, capital fled en masse, and the entire country’s economic management collapsed because no one believed anything the government said.
Trump’s attack on the BLS is pushing the U.S. down this dangerous path. This incident signifies the end of “economic truth” as a national public good and begins to transform it into the president’s personal political asset. The value of data is no longer determined by its methodological rigor and objectivity but by its ability to serve the political narrative of those in power.
When the data shows a strong economy, it is the great proof of “Trump Economics”; when the data shows a weak economy, it is a malicious fabrication of the “deep state.”
In this power transfer, Trump is attempting to forcibly shift public trust in institutions to trust in himself. This is a gamble, betting that his personal charisma can overshadow the professional credibility of a century-old institution. If he succeeds, the next BLS director will face a soul-searching question: Is my loyalty to the data or to the president?
If it is the latter, then the guardian of the U.S. economy will be reduced from a vigilant “watchdog” to a pitiful “lapdog.”
Between a watchdog and a lapdog, there is no middle ground.
When the dust settles, this incident leaves us with not just short-term turbulence in the financial markets or a political spat. It touches the core of how a modern democratic country operates: do we still believe there exists an objective reality independent of politics?
A country’s economic data, like its legal system and freedom of the press, is the cornerstone of maintaining social trust and stable operations. Undermining it is equivalent to shaking the foundations of governance in the entire nation. When global capital is asking, “Can we still trust U.S. numbers?”, this will cause immeasurable erosion of the dollar’s status as the global reserve currency.
Will we get a watchdog that dares to sound the alarm when a storm approaches, or a lapdog that only caters to its master’s will? On this issue, there is no ambiguity; the answer will determine whether we can navigate through the storm or accelerate our plunge into darkness.
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