The Crazy in Economic Data

September 16, 2019

Dean Baker
Truthout, September 16, 2019

See article on original site

I talked to a reporter last week who wanted to know if Donald Trump could manipulate economic data for political advantage. For example, could Trump make the Bureau of Labor Statistics (BLS) show a lower rate of unemployment or the Bureau of Economic Analysis show a higher rate of GDP growth, just before the election next fall?

I told the reporter that it would be extremely difficult. First, the people at these and other statistical agencies are dedicated professionals. It is inconceivable that if Trump told them to ignore the real data, and only give him good numbers, most of them would not balk.

Furthermore, since so much of the data are publicly available, it would be very hard to do this without being detected. For example, if Trump decided that he wanted to have the unemployment rate for October of 2020 — the last one before the election — to show a 0.5 percentage point drop, he couldn’t just have BLS lower the overall unemployment rate by half a percentage point with a swipe of his Sharpie.

We have data on unemployment rates, by race, by gender, by education and a variety of other characteristics. Trump would have to make all of these rates drop in a manner that was consistent with an overall drop in the unemployment rate of 0.5 percentage points.

And, it would be much more complicated than just reducing all of these unemployment rates by 0.5 percentage points to match the overall decline. Other items would have to be changed as well, such as duration measures, the share of voluntary and involuntary part-time workers, and the reasons workers give for being unemployed (quitting vs. being laid off).

Theoretically, someone could do something like this, but it would have to be a person who was very knowledgeable about the data. And, they would almost certainly need the cooperation of at least 20 or 30 people at the BLS.

While I find the prospect of Trump manipulating economic data highly unlikely, it is incredible that we have to think seriously about this possibility. All presidents will try to spin data to make their arguments more compelling, that is politics. But literally altering data to lie to the public about the state of the economy is a huge further leap.

Nonetheless, after the spectacle about the Hurricane Dorian projections, it is certainly plausible that Trump would try to manipulate the data on unemployment, GDP growth, wage growth and other key measures. Clearly, many of his top aides would also consider such manipulation to be acceptable, as was the case with Dorian. Apparently, most Republicans in Congress also think it’s fine that their president toys with official hurricane projections rather than just owning up to a mistake.

One of the bizarre twists on this issue is that some Republicans, including Donald Trump Jr., accused Obama of manipulating the unemployment rate. Of course, they had zero evidence for these accusations; they were just unhappy with data which made the economy look good under Obama.

As is often the case, when people make up lies about others, they reveal a great deal about themselves. In effect, they were telling us that they would have no qualms about manipulating government statistics if they had the opportunity.

The only positive side to this story is that we can be confident that Trump and the people around him lack the competence to manipulate economic data in a way that would not be completely obvious to anyone other than his hardcore supporters.

Just as we saw President Trump looking like a fool with his Sharpie-altered hurricane map, perhaps we will see him holding up a chart showing a half percentage point drop in the unemployment rate on the last Friday before next year’s election. But this will simply be the last act in the clown show, not a lie that any credible person will take seriously. (Fingers crossed.)

Support Cepr


If you value CEPR's work, support us by making a financial contribution.

Si valora el trabajo de CEPR, apóyenos haciendo una contribución financiera.

Donate Apóyanos

Keep up with our latest news