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Trump called the government’s job numbers ‘phony.’ What happens now that he’s in charge of them?

(Shawn Thew/Bloomberg)

During the campaign, Donald Trump called the official unemployment rate published by the Labor Department “such a phony number,” “one of the biggest hoaxes in American modern politics” and “the biggest joke there is.” He variously described the real rate as 18, 19, 20, 21, 22, 24, 25, 28, 29, 30 and 35 percent. In August, he told Time magazine that the “real unemployment rate is 42 percent.”

The criticism didn't stop after the election: As recently as December, Trump called the rate “totally fiction.”

These statements are generating concern among some economists as Trump, a professed outsider and enemy of entrenched Washington bureaucrats, takes charge of the agencies responsible for publishing the numbers he has criticized. It has left some economists questioning whether the Trump administration could undermine the credibility of government-issued economic data in the future, either in its words or actions.

“Will they continue to say that facts don’t matter, will they denigrate the statistical agencies of the country?” said Bill Spriggs, the chief economist to the AFL-CIO. “If we can’t agree on the facts, then we’re not going to be able to discuss the specifics of his policies, and I’m very nervous … to see how they act.”

Investors around the world move markets based on data collected and published by the Department of Labor, the Department of Commerce and other agencies. Business leaders use the statistics to determine their strategies, while officials at all levels of the government, as well as the press and academics, look to the data to plan and evaluate their actions.

Following President Trump's statements in recent days about the size of his inaugural crowd and voter fraud in the 2016 elections, his administration has faced questions about its commitment to transparently releasing accurate data. On Tuesday, government employees expressed misgivings as Trump administration officials ordered multiple federal agencies to halt their communication with the public or the press, including news releases, social media messages and correspondence.

During a confirmation hearing for Rep. Mick Mulvaney (R-S.C.), Trump’s pick for budget director, Sen. Claire McCaskill (D-Mo.) pressed him for assurances that the data released from the Office of Management and Budget would be trustworthy.

“I have been astounded over the last three days over what has occurred,” McCaskill said. “If the president asks you to not issue real data or asks you to alter data according to his narrative, what would your reaction be?”

Mulvaney vowed to bring a “fact-based approach” to the Office of Management and Budget. “The credibility that I think I bring to this job is that I believe very firmly in real numbers,” he said. “My job is to tell the president the truth.”

He added: “I don’t imagine the president of the United States will tell me to lie.”

Beyond fiddling with the numbers

Economists and current and former employees of the statistical agencies agree that it would be difficult for Trump’s administration to tamper with economic data directly.

At the Bureau of Labor Statistics, an independent agency within the Labor Department that computes important figures like the national unemployment rate, hundreds of career economists and mathematicians are involved in calculating any one number, and the data they draw on to reach those calculations is publicly available, said Victoria Battista, an economist at the BLS.

“It’s not just one number that a manager can change in a spreadsheet after closing time,” said Salim Furth, a research fellow at the Heritage Foundation.

Trump will be in charge of making just one political appointment at the BLS — the commissioner. And many of the statistics that BLS gathers are mandated by law.

Heidi Shierholz, the former chief Labor Department economist under President Barack Obama, said she isn’t worried about the threat of tampering, because of extensive safeguards. Still, she said there could be other risks to the integrity of economic statistics.

“The thing that is a much deeper concern in my mind is how those agencies are respected, and the undermining of the public’s faith in the quality of the data is a real threat,” said Shierholz, now a director of policy at the left-leaning Economic Policy Institute. “When your president is saying, 'Oh the unemployment rate is not what they say it is,' people don’t know what to believe. And that’s a real problem.”

The other threat, according to Shierholz, would be a cut in the bureau's funding. “There’s not room to cut anymore. It would severely damage our data resources,” she said.

A different way of looking at the data

While some might worry about the sanctity of government statistics under Trump, economists also agree that Trump and his advisers have a point in saying that the traditional unemployment rate isn't always the best measure of the economy.

The traditional unemployment rate — known by government statisticians as the U-3 rate, now at 4.7 percent, counts only those who are unemployed and actively looking for work. But it doesn't include people who have given up looking for work, so-called discouraged workers, or those who are working part-time but would like to be full-time. The U-6 rate, which does incorporate those workers, was 9.2 percent in December.

Michael Strain, the director of economic policy studies at the American Enterprise Institute, said focusing on the broader U-6 rate rather than the more traditional U-3 rate is “completely defensible.” However, that's different than some of Trump's other claims about economic data, he said.

“It is flatly untrue to say the Obama administration has been lying about the unemployment rate, and the real unemployment rate is 42 percent. It was inappropriate to say that,” Strain said.

The White House did not offer comment for this story, but pointed to remarks press secretary Sean Spicer made earlier this week when asked what the national unemployment rate was. Spicer did not answer the question directly, saying that the government puts out an array of unemployment figures “so that economists can view them and decide, look at different landscapes on … how to make economic policy.”

“Too often in Washington, we get our heads wrapped around a number and a statistic. And we look at and we forget the faces and the families and the businesses that are behind those numbers,” Spicer said.

“I think [Trump] addressed that in his inaugural speech when he talked about shifting power outside of Washington D.C. back to the American people because for too long it's been about stats … and it's been about, what number are we looking at as opposed to what face are we looking at?”

Ylan Mui contributed to this report. 

See also:

Is Trump keeping his economic promises? Here are eight ways to know.

Trump’s election adds growth, uncertainty to global forecast, IMF says

One chart shows how Obama’s job performance compares with his predecessors