Data at threat: The Trump administration’s war on statistics won’t end well

Shutting down an obscure statistical advisory panel may not strike anyone as a scandal, much less an outrage. But as an economist who has presented to the FESAC, I know how it improved the information used by both the federal government and private enterprise to make economic decisions. Timely and accurate government data is important.

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One of FESAC’s official responsibilities was “exploring ways to enhance the agencies’ economic indicators to make them timelier, more accurate and more specific to meeting changing demands and future data needs.” In the US, this is an ongoing effort, not a one-time task that has been “fulfilled,” which was the stated reason for terminating the committee.

The panel’s 15 members, who were unpaid, brought deep technical expertise on economic measurement from the private sector, academia and the non-profit world. They were a sounding board for the Census Bureau, Bureau of Labor Statistics, and Bureau of Economic Analysis, which produce most official US statistics.

If statistics fail to keep up with the changing economy, they lose their utility. When the panel last met in December, one focus was on measuring the use and production of AI. Staff shared existing findings on AI, such as from the Business Trends and Outlook Survey that began in 2022, and outlined new data collection efforts. AI’s current use among businesses has nearly doubled since late 2023, and even more businesses expect to adopt AI soon.

The panel was asked what data products would be most useful. Expert feedback, including a request to harmonize the definitions of AI across surveys and align with cutting-edge research, is especially valuable at the early stages of data collection. The growth and employment effects of AI are pressing questions facing the economy, and external experts are crucial for the generation of high-quality data.

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Enhancing official economic statistics under budget constraints often requires creative approaches. At its meeting last June, the panel discussed using private-sector data to create statistics on regional employment and other outcomes. 

There is considerable demand among businesses and local governments to have timely geographic detail, but it is cost-prohibitive with current government surveys. FESAC members offered first-hand knowledge of the pros and cons of using private-sector data. The committee contributed far more than just twice-a-year meetings. It also created relationships with the private sector that government agencies could draw on to improve their statistics.

The US National Academies of Sciences, in discussing best practices for statistical agencies, argues that external advisory panels are a good way to engage with users of the data and obtain expert advice. Moreover, external evaluation should be part of regular programme reviews to ensure quality, relevance and cost-effectiveness. That’s exactly what FESAC did.

US statistical agencies need more, not fewer, resources to meet new challenges. During the campaign, Trump repeatedly questioned the credibility of US employment data. He claimed that the downward revisions of monthly payrolls showed political interference. 

Disbanding the FESAC does not advance the administration’s goal of greater government efficiency. In 2024, the panel’s cost was expected to be just $120,000, covering travel expenses and minimal staff support. Virtual meetings could have reduced those costs further. Regardless, its benefits far exceeded that cost. Putting a low-cost, high-value panel on the chopping block does not bode well for other investments in official statistics. 

Reductions in staff and budget would likely degrade the quality of the official statistics. Even before Trump took office, all three US agencies operated in a tight budget environment.

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Reduced transparency in official statistics is perhaps the most troubling aspect of disbanding the FESAC. Cutting off agency staff from external advisers creates an environment where political interference could occur easily—and go undetected. With political officials such as Lutnick arguing publicly that GDP should exclude government spending, it is especially important to have independent experts.

The FESAC is not alone. By executive order, the administration is ending several advisory panels in the federal government while reducing transparency and technical resources for agencies. It’s a short-sighted approach that could undermine essential government services. ©Bloomberg