Sacked

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   By Guest Blogger Ryan Lewenza

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Barely six months into President Trump’s second term, the pace and scale of change have been unprecedented in modern U.S. history. In that short time, he has upended the global trading system by imposing the largest U.S. tariffs since the Great Depression; slashed the federal workforce; created the Department of Government Efficiency (DOGE); and shuttered or dismantled agencies including the Department of Education and the Consumer Protection Bureau.

He has overhauled immigration policy through mass arrests and deportations, moved to end birthright citizenship, and signed the sweeping One Big, Beautiful Bill, making his earlier tax cuts permanent while cutting Medicaid funding. He’s attacked and forced changes at many of the leading universities, law firms and media outlets. He’s been busy for sure, as seen by the record number of executive orders signed in his first 100 days.

Number of executive orders in first 100 days

Source: NPR

But, of all his actions, the one that most alarms me from an economic and market standpoint is his dismissal of Bureau of Labor Statistics (BLS) Commissioner Erika McEntrafer.

A few weeks ago we got the all-important nonfarm payrolls report for July and it was a very weak jobs report, showing a major downshift in the US economy, possibly in response to Trump’s tariffs.

The July report showed just 73,000 jobs were added last month coming in well below expectations of 117,000. Even worse, was the negative revisions to the previous months, showing much lower job growth than previously thought. May and June numbers were revised down by a large 258,000, which was one of the largest downward revisions in years.

The disappointing report angered President Trump and prompted him to fire the BLS commissioner, the official responsible for overseeing the collection and release of vital U.S. economic data. Trump posted on Truth Social that day, “Today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad.” Essentially, he didn’t like the report and claimed, without any proof, that the numbers were manipulated to hurt him.

This is of course nonsense.

First, revisions to past jobs data are completely normal. The BLS completes a monthly survey of 121,000 businesses and government agencies. In a typical month they hear back from 60% of the firms. The remaining firms then respond over the next month or two. So, the initial monthly jobs numbers are an estimate, and then in subsequent months they revise the data based on more companies responding to the survey, which is why revisions occur and are normal.

Second, the commissioner who was fired, does not control the numbers the agency publishes and doesn’t even see them until they have been finalized. There’s a staff of career government workers that compile this data with the commissioner essentially signing off on the final data. For the data to be rigged that would mean there is a conspiracy among hundreds of government workers.

Finally, Trump’s claim that the data was ‘rigged’ has no basis in fact and his decision to fire her was simply political and that he didn’t like the numbers.

The problem is that this is the kind of conduct typical of banana republics and authoritarian regimes – the kind of governance associated with places like Turkey or Argentina, not the United States.

For example, the Turkish President, Recep Tayyip Erdogan, fired their head of state statistics in 2022 after he was upset over the high inflation readings the country was experiencing. His decision to fire the individual came right after the institute reported that inflation had hit 36% yoy in the previous month.

Turkey’s inflation rate

Source: FRED

The same thing happened in Argentina in the early 2000s. Then President, Nestor Kirchner, fired Graciela Bevacqua, the head of Argentina’s statistics department, after she reported higher inflation then the President wanted to see.

And how did this work out for these countries?

Investors and institutions lost trust in the government statistics with investors fleeing. Inflation continued to rise despite the sacking of the statistics heads. Their currencies have continued to decline, and their economies remain weak to this day.

Now, this is happening in the US with potentially grave consequences. When investors and institutions that rely on this critical government data (e.g., the Federal Reserve in setting interest rates), start to question the validity of the government data then it erodes confidence.

The quality and transparency of government data are sacrosanct, and as the United States stands as a beacon on the global stage, any erosion of that trust could undermine both the economy and the nation’s exceptionalism.

If investors begin questioning the data, then investors could pull their money out of the U.S., which could depress stock prices. US treasuries could sell-off losing their important safe haven status with interest rates rising. And the US dollar could decline as investors reduce their exposure to US markets.

Trump’s decision to fire the commissioner and install a partisan loyalist willing to carry out his agenda could ultimately backfire, producing the very outcome he hopes to avoid.

Trump has nominated economist E.J. Antoni to lead the BLS, despite his limited experience in compiling government economic data. A long-time supporter of Trump and his policies, Antoni’s appointment raises concerns about potential partisanship in overseeing the agency. He has already proposed eliminating the monthly jobs report in favor of quarterly releases – a controversial shift that, for a role of such importance, is hardly an encouraging start.

Following the nomination, Trump posted he “will ensure that the Numbers released are HONEST and ACCURATE.” I sure hope for EJ’s sake, and the country writ large, Trump is correct.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.

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About the picture: “The best kind of day is a run at my friend’s farm in the spring before the hay and the daisies get cut,” writes Della.  “In beautiful Nanaimo!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/08/23/sacked/