Labor Department Inspector General Initiates Review of BLS Data Collection Practices
The U.S. Department of Labor’s Office of Inspector General (OIG) announced on Wednesday that it has commenced an investigation into the data collection methods employed by the Bureau of Labor Statistics (BLS) for employment and inflation metrics.
This inquiry arises amid heightened scrutiny from the Trump administration, which has criticized the BLS following notable downward revisions to employment figures. President Donald Trump terminated BLS Commissioner Erika McEntarfer in August shortly after the agency released a disappointing monthly jobs report, citing political motivations behind the data.
The OIG, an independent office protected from political interference and currently led by Acting Deputy Inspector General Michael Mikulka, outlined in a letter that it is “initiating a review of the challenges” faced by the BLS in collecting and reporting key economic indicators.
Focus on Inflation Metrics and Employment Data Revisions
The investigation was prompted in part by the BLS’s recent decision to reduce data collection efforts for two critical inflation measures: the Consumer Price Index (CPI) and the Producer Price Index (PPI). Additionally, the probe responds to the agency’s significant downward revision of new job estimates in its monthly Employment Situation Report.
In a preliminary report released Tuesday, the Labor Department revised employment data for the year ending March 2025 downward by 911,000 jobs, marking the largest revision in over twenty years. Laura Nicolosi, assistant inspector general for audit, emphasized that the OIG will concentrate on the challenges and mitigating strategies related to collecting PPI and CPI data, as well as the processes involved in employment data collection, reporting, and revisions.
The letter was addressed to William Wiatrowski, who has served as acting BLS commissioner since McEntarfer’s dismissal on August 1.
Political Context and Industry Reactions
McEntarfer’s removal surprised many experts who warned that politicizing the BLS could erode confidence in vital economic statistics relied upon by investors and policymakers. However, Trump and his supporters defended the decision, arguing that the BLS data had become unreliable and were influenced by political bias. They have cited prior large data revisions, although some claims about timing and figures have been disputed.
Labor Secretary Lori Chavez-DeRemer commented Tuesday that the latest downward employment revision “gives the American people even more reason to doubt the integrity of data being published.” She stressed the importance of maintaining accuracy and impartiality in economic data, without political manipulation.
This investigation is poised to shed light on the integrity and reliability of crucial economic data amid ongoing political tensions.
— Reporting by Erin Scott/Bloomberg; additional contributions from CNBC’s Greg Iacurci.
FinOracleAI — Market View
The initiation of an OIG investigation into the Bureau of Labor Statistics’ data collection practices introduces uncertainty around the reliability of key economic indicators such as employment and inflation metrics. This scrutiny may temporarily undermine market confidence, particularly among investors who rely heavily on these statistics for decision-making.
Risks stem from potential findings that could question the accuracy or methodology of BLS data, which might lead to increased volatility in equity and bond markets. Policymakers and market participants will closely watch the probe’s progress and any subsequent changes in data reporting standards.
Overall, while the investigation aims to enhance data integrity, the short-term market impact is likely to be negative due to increased doubt about foundational economic data.
Impact: negative
