Key Concepts
- BLS (Bureau of Labor Statistics) Household Survey: A survey measuring employment statistics.
- Response Rate: The percentage of people who complete the BLS survey.
- Benchmark Numbers/Revisions: Periodic reconciliations of monthly employment figures with overall numbers.
- Political Influence/Rigged Numbers: Allegations of manipulation of employment numbers for political purposes.
- Inflation: A general increase in prices and decrease in the purchasing value of money.
BLS Household Survey Response Rate
The conversation begins by highlighting the declining response rate of the BLS household survey over the past 10-12 years. The response rate has dropped from approximately 90% to as low as 60%. The survey is described as arguably the most important source of information about the economy.
Jeremy Siegel's Criticism
Wharton professor Jeremy Siegel criticized the BLS for the low response rate, calling it unacceptable for such an important statistic. He suggested making the questionnaires mandatory and setting a time limit for completion. He also questioned why there wasn't an explanation for the "biggest mistake in 50 years," referring to a significant revision in employment numbers. The revision was 258,000 jobs less in two months which was the biggest revision since 1968.
President Trump's Claims of Rigged Numbers
President Trump alleges that the employment numbers were "rigged" for political reasons to negatively impact him during an election. He claims that the numbers released just before the election made the country look as if it was "on fire" economically, despite his belief that the economy was doing well. He mentions a revision of almost 900,000 jobs downward that occurred about two weeks later.
Benchmark Revisions vs. Rigging
The interviewer clarifies that the 900,000 job revision was a "benchmark" number, a periodic reconciliation of monthly figures with overall numbers that the BLS does twice a year. President Trump dismisses this explanation, insisting that the numbers were deliberately falsified to hurt his chances of winning the election, particularly given poor performance from Joe Biden at the time.
Timing and Impact of Revisions
Trump focuses on the timing of the positive numbers before the election and the subsequent downward revision, suggesting a coordinated effort to influence the election's outcome. He argues that if he had lost the election, he would have accused the BLS of releasing phony numbers. After he won, the downward revisions were released to bring the numbers back to reality.
Conclusion
The conversation revolves around concerns about the accuracy and reliability of the BLS employment numbers. While Jeremy Siegel focuses on the declining response rate and the need for improved data collection methods, President Trump claims that the numbers were intentionally manipulated for political gain. The interviewer attempts to clarify the difference between routine benchmark revisions and deliberate manipulation. The main takeaway is the questioning of the integrity of economic data and the potential for political influence on government statistics.
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