Trump Tried to Mess With the Jobs Report. It Didn't Work. | Diving In

Have you been hacked? Who got to you? Blink three times?
If you need rescuing. Look, there was the response I
got when I said the last job market report was strong,
And look, I get the unease. We're talking about administration
that lies all the time. This was a president who
fired the head of the Bureau of Labor Statistics after
the numbers didn't go his way. He tried to install
a crank in her place. Those are real reasons to worry.
So I'm not going to ask you to switch your
brain off and pluly trust the government. I sure don't.
In fact, quite the opposite. I'm here to help you
look more carefully. I want to explore how our economic
numbers are actually put together, to give you a sense
of what tampering might actually look like if it were occurring.
And I want to help you assess the evidence for yourself.
Because here's the thing. I still believe the jobs report.
It's not because I trust politicians, but because I do
know how these numbers are put together. I know how
all the things that have to do if they wanted
to corrupt the numbers, and I know what the warning
signs would look like if someone were trying. But I
get it today. It's not enough for me to tell
you that I trust these numbers. I want to equip
you so that you can make your own informed judgment.
To do that, we're going to have to answer six questions.
Why do these facts feel so uncomfortable? Why the bare
less scare was real, How the institution quietly held, why
I believe the numbers, what distorted data actually looks like.
And finally, once we believe the data, If we believe
the data, why you might be drawn to believe the
labor market right now looks reasonably strong. So let's start
with the first question, which is why do these facts
the job market looks strong feel uncomfortable. The latest government
reports said that non farm payrolls rose by one hundred
and seventy two thousand in May and that the unemployment
rate held steady at four point three percent. That's a
factual claim about what the Bureau of Labor Statistics says
it found. It's not yet to claim about whether those
numbers are good or bad. That interpretation's going to come later.
But for a lot of people, just hearing those numbers,
which sound pretty strong, was jarring. The reaction was instant.
It was impossible. They said it was fake, that it
was propaganda. Justin must have been God at Hey, this
instinct that's very human. We all like stories that make
the world feel coherent. That leads us to prefer facts
that slot neatly into the picture that's already sitting in
our heads. But economics begins precisely where that instinct ends.
Economic says, start with the reality, then build your story
to make sense of it. Don't start with a story,
and then decide which facts you're willing to admit that's
the problem, or to put it in more Platypus seeknoms
terms sometimes the world hands or platypus. What do I
mean by that? Well, the first time the Europeans saw
a platypus, a lot of them called it a fraud
instead of calling it the world's cutest animal. They saw
a duck bill and a beaver tail. They saw it
laid eggs. But it's also a man will come on.
A British scientist named George Shaw, a serious man, a
museum curator no less, He literally checked the pelt for stitches.
He thought someone had siwn a duck's beak onto a beaver.
So the problem wasn't that the platypus was fake. The
problem was that it didn't fit the model in the
BRIT's heads, so they denied the reality sitting right there
in front of them. And I think that's what's happening
right now with the labor market. The jobs report doesn't
fit many people's preferred story, so rather than update the story,
they reject the evidence. That's bad science, it's bad economics,
and in politics, as in life, it gets very dangerous,
very quickly. But it's also true that the appeal of
this type of emotional response has been heightened by the
very real concerns coming from the Trump administration and its
treatment or mistreatment of information. And I think it's insulting
that you are trying to test my knowledge of economics
and the decisions that this president has made. The bar
Less scare was real, and that's our second point. It
was real. There are good reasons to be suspicious these days.
You're not going crazy. Last year, after a week jobs report,
President Trump fired the commissioner of the Bureau of Labor Statistics,
our chief dork Erica mcanniffer, and accuse the agency of
dishonesty with absolutely no evidence and no evidence has subsequently
come to light. This was a big deal for me,
earth shattering on I remember it very well. I was
asleep in a hotel room in Tokyo and my better
half literally shook me awake at six am to tell
me he does he fired the BLS commissioner. That's how
big of a deal it was. It was literally unprecedented
because the Bureau of Labor Statistics, it's one of the
country's core truth telling agencies. It measures so much of
what matters unemployment and jobs, and inflation and productivity, the
basic plumbing of economic reality that we all rely on.
This story got worse, if you remember, the administration put
forward a bloke by the name of E. J. And Tony,
a partisan hack, wildly unqualified to run the Bureau of
Labor Statistics. He had no knowledge of running a bureau,
no experience studying labor, and no background collecting statistics. Oh
he did have one qualification. He was at the Capitol
on January sixth. So if you saw that whole thing
play out and you thought, hang on, maybe they're trying
to leticize the numbers, you were right. You should worry
when leaders attack the statisticians. The very notion of truth.
You should worry when they sacked people for publishing unwelcome facts.
You should worry when they try to install loyalists in
truth telling institutions. But that still leaves us with the
next question. You see, the scare was real, but what
happened next? Did the institution collapse or did it hold?
Here's where I want to tell you about how the
institution quietly held. The public heard about the firing, I
bet you did. They heard about the crackpot nominee. But
most people missed was what came next. The institution kept running,
the worst nominee was withdrawn and the replacement who's been
nominated as a serious, sober minded statistician with a genuine
commitment to the truth. The problem here is a problem
of how we do news. The attempted sabotage that was
front page news, the institution quietly holding. It wasn't dramatic,
it wasn't noisy, It didn't get headlines. Public servants do
their job, somehow never ends up on the front page
of the paper. So none of the major networks really
told that story, although we did here on Platipus Economics.
I'm coming back to talk about it again, because I
think this is a story that the platypus economics crowd
cares about. And so while everyone was understandably staring at
the circus, the Bureau of Labor Statistics kept producing data
the way that it always does. There was career staff,
there were routine processes, standard release schedules, overlapping internal checks.
The acting leadership stayed in the hands of the long
term professionals, so the cranks never got near the suit
of power. The President was ultimately forced to withdraw his
nomination of the Charlotte and e J ANDTNI. The replacement nominee,
Brett Matsimoto, looks like exactly the sort of person a
normal White House would nominate for this job. In fact,
he could be appointed by Democrat or publican. He's a
career public servant, a statistician, a social scientist, someone whose
professional life has been about measurement, statistics and footnotes, not messaging.
In other words, the anti and Tony. There's no flashy
nonsense here. He never attended a coup. He's just a
bloke who quietly spent his years trying to count things
doing correctly made I love this stuff. It's extraordinary it's
the quiet beauty of serious people doing serious work. But
for us, the point is that we avoided the worst
story that so many of us feared. More than that,
the Bureau of Labor Statistics today remains in very good hands.
The bureau itself is fine, and so as statistics. The
president who tried to damage it, that's another matter entirely,
and frankly, I'm still mad about it. Trump tried to
bully the institution. He did real damage to public trust,
and that's why so many people are asking so many
questions right now. He is the reason why your first
reaction might have been did they cook the books? Problems?
Not you, it's him. Trust me. I'm like a spite person.
And if Trump had gotten his way, maybe the books
would be cooked. But he didn't. Our official economic statistics survived,
and that survival is part of why I'm willing to
make the next argument. So let's turn to that next argument,
the fourth question, Why I believe the numbers that came
out last week and the month before and the month
before that. Here's the starting point. I know how these
data are put together. I know there are dozens of
people and processes that sit behind between the presidents whim
and the final published number. I know exactly how big
the conspiracy would have to be to fake this thing,
and I know this administration leaks like a sieve. At
a personal level, I literally personally know many of the
people who put these numbers together. I know their integrity.
I know that they'd call me and they'd tell me
if things were going wrong, And I know what the
tells would be in the data if the processes were rigged.
That's why I believe the numbers. But that's not good
enough for you. You need to know how to check
for yourself. So let me give you a few clues. First.
The Job's report isn't just one number from one source.
It actually combines two separate surveys. There's the household survey,
which is called the current Population Survey, that gives us
the unemployment rate and broader information about who's work and
who's looking for work and who's dropped out of the
labor force. And then there's the payroll survey called the
Current Employment Statistics Survey, which measures the number of people
who are on employer's payrolls. So what we have is
two different instruments measuring three closely related things, and that's
really useful. It should help make you more confident because
we're not hanging the whole story just a one survey,
one method, one lever, one set of statisticians. Okay. Second,
we can actually look inside these data from the outside.
The results from each individual survey that each person fills
in and the household survey they posted online. We call
it microdata. Real researchers can and do dig in every
single month. They test their data, they challenge it, they
cross check it. No one has found anything fishy so far.
And Third, the payroll data the other data, so it's
not just floating in the breeds. Each benchmarked, that is
to say, it's checked against broader administrative records. There's a
complicated survey called the Quarterly Censors of Employment and Wages,
And basically what they do is they get the unemployment
insurance records from every state. Now, it's very hard for
a federal government to falsify state records, and so in
plain English, the monthly payrolls estimate gets checked against a
much more complete count later on that comes from the states,
not from the Feds. Fourth, what's wonderful about the United
States is we've also got private sector smell tests beyond
the employment data collected by the Bureau of Labor Statistics.
The payroll Company ADP has counts of how many checks
it's printed. Bank of America has account linked data, home
based tracks, small business and hourly worker data. Paychecks has
its own small business employment measure. All of these measures
are imperfect. None of them are as precise as BLS measure,
and none of them can tell you what happened last
month better than the official measure. But they're useful enough
that if the government numbers were being systematically falsified or
messed with, that broader ecosystem would start to smell funny
and the official numbers would look very different from everything
else that we're seeing. That's one of the wonderful things
about American the American statistical system. We're a big economy,
lots of ways of measuring things, and so our statistics
don't just dwell alone in the dark. You can think
about our economic statistics is like a ship with multiple
navigation systems. We've got GPS, we got radar, and when
you don't trust the GPS, just look up at the stars.
They'll help you. Each one of them's imperfect, but if
they all say you're in the same ocean, you probably
are in that ocean. And if one of them starts
to say you're in the Sahara, well the others are
going to look a little different, and that's your alarm bell. Now.
I want to add one really quite important nuance to this.
These data, the government data, like all data, involve scientific judgments.
If you've ever sat through a status class, you know
this stuff is hard. Sampling is hard, Waiting is hard,
seasonal adjustment is hard. Good statisticians can and do argue
about how to make the numbers more accurate. That's healthy
and that's science. I play in that sandbox sometimes, but
that's a completely different claim from saying the numbers are dishonest.
So the point I want to make is debating about
how to improve imperfect data. That's one thing, and it's
something you're going to hear me talk about a lot,
but loose talk about politically corrupted numbers is an altogether
different thing that should only be done when you've got
more than just a suspicion. And if you care about truth,
if you care about the scientific method, you should fight
back against that confusion. Because the first is an argument
about how to make the data more accurately reflect reality,
and it's an argument worth having. The second is an
attack on reality itself. And so for now, what might
be the most useful question is what would actually look
like if our government really was distorting the data. I
don't want us to be complacent. Now. I've been an
economists for a while and I've seen authoritarian regimes mess
with their numbers, which means I can tell you a
little bit about what history tells us we ought to
be looking out for. Turns out, it's actually pretty uncommon
to literally invent a number entirely out of thin air. Honestly,
it's just really hard to do without looking like a clown.
The real playbook that the authoritarians use is more subtle,
and I think more dangerous, because it's a harder set
of stories to tell. Instead of making up numbers, they
attack the credibility of their statisticians. They sack or intimidate
those who publish unwelcome facts. They try to reduce the
transparency of the process by which the numbers are put together.
They suddenly change methods all of a sudden, for no
reason whatsoever. They create discontinuities so measurement in one month
is different measurement in the next, and that makes it
very hard to compare what was happening before the regime
came to powered what happened after you stop publishing the
data on a monthly level and you move it to quarterly,
you stop publishing data you don't like and say the
problem must be that the data were wrong, because our
policies are certainly working. And look the president, he started
at the top of his list, and he was working
his way through that list, and he didn't get all
the way through. EJ. And Tony, if he'd been appointed,
was willing to keep fighting to degrade our data, but
he was stopped. Now, I remain vigilant, and I hope
you do too. So no, I'm not naive. I'm not
saying that governments never distort data. I'm saying that I
know what it looks like, and what I see right
now is an administration that has flirted with that danger
but hasn't, at least so far, for just anything that
looks remotely like a fabricated job's number. The administration, to
be clear, lies, It lies when it wakes up, it
lies when it goes to bed. And that lies in between.
I'm not defending a word they say. What I want
you to do is distinguish between what the White House
says what the official statisticians say. That, in turn brings
us to a different question. If the numbers are honest,
the jobs numbers, what do they actually mean? And why
does this labor market look reasonably strong? So we saw
a payroll gain of one hundred and seventy two thousand
in May, followed by upward reversions that put the past
couple of months a little bit higher as well. Those
are simply facts saying that this run of numbers is
good news and that you should feel more upbeat about this
labor market. That's an interpretation. That's my interpretation. And look,
a reasonable person can disagree about how upbeat to be.
Different people can put different weights on different parts of
the report. That's fine, But here's my read, and I'm
going to show you my work. Payroll growth of one
hundred and seventy two thousand would have looked pretty middling
during the big snapback from COVID, that's correct. Back then,
millions of people were flooding back into ad economy that
had been temporarily switched off, but that comparison, that's the
wrong benchmark for today. Back then, the economy was climbing
out of a crater. You should have expected large monthly
gains when you're rebuilding after a moment like that. Today
we're back to normal, But actually more than that, we're
in a new normal because the Trump administration's immigration crackdown
has led population growth to virtually stop for the first
time in decades. That in turn means that the economy
doesn't need the same gigantic pace of job creation to
keep the labor market healthy and so, compared to today's benchmark,
a benchmark that's relevant for this low immigration world we're
in right now, one hundred and seventy two thousand jobs
is a pretty solid number, and it didn't come alone.
It came out to similar numbers in March and April,
and in fact we've seen through this period the unemployment
rate held pretty steady at about four and a quarter percent.
This doesn't mean everything's perfect. It doesn't mean every work
is thriving. Macro data and personal experience can diverge one
person's labor market, your labor market, even it's not the
whole labor market. Both things can be true at once.
You can struggle and the aggregate can be doing okay.
But if you want to ask me whether this report
says that recession panic should cool down, whether it says
the labor market is holding up better than many feared,
whether it says the economy is still adding jobs at
a healthy clip relative to the supply of available workers,
my answer is yes, that's what makes these pretty good numbers. Look,
here's the thing. If I only ever give you facts
that make you feel good, I'm not telling you the
whole truth. That's a tell that I'm not doing my job,
and you should listen to me less. That's a test
you should applied any commentator in economics, in politics, and
indeed in any domain. A healthy society depends on institutions
that tell us uncomfortable truths. None of us get to
keep the part of reality that flatters our worldview and
throw away the rest. That's not economics, that's not science,
and over time, it's not democracy either, because if every
inconvenient fact is dismissed as propaganda, then we don't just
lose one job's report. We lose your ability to spot
the platypus