Sometimes when I’m right, I wish I weren’t. In my previous article in this magazine, I wrote about the importance of keeping partisan politics out of the production of government economic data. I asked, “Are we one bad jobs report away from a presidential administration taking matters into its own hands?”
Apparently, we were.
The Bad Jobs Report
The July jobs report was definitely a bad one. Not only had the U.S. economy produced only 73,000 jobs in July (since revised to 79,000), but the May and June estimates were revised downward by a total of 258,000 jobs. (And the June figure has been further revised to a loss of 13,000 jobs). The economy is much weaker than we realized.
The day after the July report came out, President Trump fired the commissioner of the Bureau of Labor Statistics (BLS), claiming she was incompetent and insinuating it was because she’d been appointed by former President Biden.
What happens now? Some experts have claimed that because of the breadth and complexity of the BLS’s data gathering systems, no one person, not even the new commissioner, can falsify the data. Even if the new data chief manages to do that with headline numbers like the unemployment rate, the data I use as a forensic economist may be protected by their obscurity.
In other words, yes, President Trump may want to alter data on national job growth. But I presume he doesn’t have strong feelings about the average wage in the long-distance General Freight Trucking industry or the average number of hours spent on household activities by employed men with no minor children in the home. Both indicators (and many more) are also produced by the BLS.
The president’s actions could undermine the world’s confidence in the U.S. economy. But they probably won’t be a disaster for the practice of forensic economics. My expert reports are probably safe for now.
Life Expectancy Rebound
In other data news, the federal Centers for Disease Control (another agency whose head was recently fired by the president) released its 2023 life tables. This might not excite you, but it was big news to me.
Life tables are arrays of statistics relating to life expectancy. The problem was that the 2020 life tables were “infected” by COVID mortality, due to the surge of deaths among the elderly that year. Because of how these tables are constructed, employing the 2020 tables would have understated the life expectancy of 30- and 40-year-olds.
To avoid that problem, many forensic economists used the 2019 life tables for a few years. But with the release of the 2023 tables, the COVID mortality problem is almost gone. Life expectancy has nearly recovered to where it was in 2019, and I believe most economists are comfortable using the 2023 tables. I’ve started using them.
Ongoing Data Uncertainty
The times they are a-changin’ in the economy, and that implies possible data fluctuations. For example, the workers being deported by Immigration and Customs Enforcement (ICE) are concentrated in certain key industries, such as agriculture, construction and senior care. The resulting labor shortages could increase the wages of home-health aides, which figure prominently in many life-care plans.
One surprise, at least to me, is that Treasury bill yields, which most forensic economists use to calculate discount rates for their present-value analyses, have remained pretty stable despite tariff whipsaws and other uncertainties. The benchmark 10-year yield averaged 4.21% last year. The Wells Fargo Economics Group forecasts that it’ll remain in that ballpark, averaging 4.26% in 2025 and 4.33% in 2026.
Having said that, the recently passed federal budget is projected to add trillions to the national debt, which could have implications for T-bill yields. We forensic economists will just have to stay alert about inflation rates, discount rates and all the other data we use.
