The White House war on federal statistics

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Leading academic economists are fretting not just about what the Trump administration’s policies might to do US growth and inflation. More than 90 per cent of respondents to the latest FT-Chicago Booth poll said they were very or a little worried, too, about the quality of America’s economic statistics. Concerns have mounted after an influential advisory council — the Federal Economic Statistics Advisory Committee (Fesac) — was disbanded. With thousands of pages of US government data also being altered or removed from websites, not just economists but scientists, researchers and rights campaigners are alarmed by what they see as an incipient White House war on data.

Fesac, which for 25 years advised offices compiling inflation, employment and GDP data, is among five advisory councils to federal statistical agencies that were terminated by commerce secretary Howard Lutnick on February 28. A second advised on other economic data; three advised the US Census Bureau. Since they were involved in improving accuracy and effectiveness of data collection and analysis, including adapting to new trends and technology, Lutnick’s claim that their purpose had been “fulfilled” makes little sense.

Lutnick also unsettled many economists when he suggested — after being asked whether spending cuts imposed by Elon Musk’s so-called Department of Government Efficiency could cause a downturn — that government spending could be separated from GDP reports. Musk, too, has said GDP would be more accurate if government spending were removed, in a departure from economic theory and international practice.

Since Donald Trump returned to the White House, meanwhile, multiple data sets — on climate, crime, natural disasters, and diversity, equity and inclusion — have disappeared from federal websites. Some were deleted or modified due to directives, for example on gender ideology and orders to remove statistics on climate change. Some have fallen victim to Doge-led cuts. Some have been restored, for now, after legal rulings.

Trump is not the first US president to dispute some official data or be accused of trying to skew it in his favour; some critics worry less about the extent of changes so far than about what they might portend. But this administration’s interventions already go beyond those of most predecessors. Reliable statistics are, moreover, a public good and vital national asset. The US was a pioneer of modern economic statistics, under the economist Simon Kuznets, in the 1930s and 1940s.

Effective policymaking, by government agencies and central banks, as well as decision-making by investors and businesses, relies on accurate and timely data. Trustworthy statistics are vital, too, for experts and the public to assess governments’ performance.

Indeed, Doge’s cost-cutting efforts might yet backfire, in a specific way. Reducing government spending is seen, in part, as a route to lowering borrowing costs. But if it reduces trust in economic data, it could raise the risk premia investors demand for buying US bonds. Attempts to curb official data tend to be associated less with democracies like the US than with authoritarian countries such as China under Xi Jinping.

Some data that could prove uncomfortable for the Trump team, such as consumer confidence indices, remain beyond its control. Private sector and big tech companies could provide some substitutes for official statistics, but would not necessarily enjoy the trust previously conferred by a government imprimatur. Though economists are signalling unease on data, many investors seem more sanguine. Yet as with much else, how far the White House is willing to go may depend in part on how vocal companies and investors are prepared to be about their concerns.