The editor of RealClearMarkets, John Tamny, has a point. An important question to debate today should be: is the Bureau of Labor Statistics still relevant today?
While the August firing of BLS Commissioner Erika McEntarfer, and the subsequent appointment of E.J. Antoni by President Trump have created quite a political stir, the discussion should focus on the use and importance of the BLS’ major product: the monthly jobs report which is eagerly awaited by the business community, the White House and the media.
As a key indicator, the BLS’ Current Employment Statistics (CES) survey has been known to move the stock market. However, since the CES is a survey, it is subject to sampling error. Often the initial headline number is released despite 30 to 40% of the businesses in the sample not having responded in a timely manner. This forces the BLS to “run” with what it has for the monthly release. Hence the variability of the original number.
Subsequent revisions allow the BLS to gather more data and refine its estimate but it often takes a month or two to provide a reliable number. And there is always significant sampling variability, i.e., the mean will vary from one sample to the next. Examples abound, including the downward revision of the May and June 2025 jobs reports by a combined 258,000 jobs. Last year, the benchmark payroll growth for the year ending March 2024 was revised down by a staggering 818,000 jobs—the second-largest benchmark revision on record.
As of 2024, there were approximately 2,321 people working for the BLS. But how many of them actually work on the headline employment number? My guess is just a few hundred, not a couple of thousand.
So, if the BLS job numbers are so unpredictable, and we employ so many people to compile them, why do we pay so much attention to them? The answer is that we are all trying to guess what lies ahead for the economy. Uncertainty is bad for business. But numbers which have to be revised time after time make predictions about the future less certain.
Fortunately, the private sector offers us alternatives. If an independently produced number collected in the private sector—from Automatic Data Processing (ADP) —is as good as the CES, why doesn’t the government just use the ADP data? Payroll providers like ADP offer a robust and more agile alternative for tracking labor market activity. In addition, the correlation between the results released by ADP and the CES are usually positive. Moreover, the ADP data release predates the CES release by two days.
Out of roughly 160M employees in the workforce, ADP manages 30M workers and uses all 30M data points in their release versus a sample of 100,000 or so businesses used by the BLS. Yes, one could argue that we still need the BLS to “sample” the other 80%, but I’m not persuaded that is the case. Our society is very interconnected, and it is entirely reasonable to think that, with some variation, the behavior of 30M actual employees gives us a very good indicator of the overall employment picture.
Thus, data from sources like ADP are effectively rendering the BLS numbers redundant, or at best supplemental. ADP’s microdata can be used to produce independent estimates of employment changes. And while the CES survey has been described in the past as "one of the most carefully conducted measures of labor market activity," its output today has little value added. If you want to make the case that BLS still matters, it only does so in a “legacy” sense of maintaining a time-series of where employment has been, but not where employment is headed.
Consider the stark difference in June 2025, when ADP reported that private employers slashed 33,000 jobs, while the BLS reported an incorrect gain of 147,000 jobs. While methodological differences certainly play a role in such discrepancies, the inconsistent track record of BLS revisions and errors weighs heavily on its credibility.
Given ADP's proven ability to offer a timely, independently valuable, and even predictive measure of employment trends, the question of redundancy becomes pressing. Why should policymakers, businesses, and financial markets continue to primarily rely on a legacy source that repeatedly proves unreliable, when an alternative exists that can provide timely insights, often foreshadowing the BLS's eventual corrections?
Is there a way for the BLS to remain relevant? Possibly. Instead of promoting the headline number, the BLS should provide a confidence interval, much like the National Weather Service does with hurricanes. The National Hurricane Center forecast models show a larger cone of uncertainty the farther out in time to help local authorities better understand the data as a hurricane approaches. In a similar way, the BLS data when first released would show a large cone of uncertainty. Subsequent revisions would shrink the cone as the underlying data becomes more accurate.
Unfortunately, the odds of this happening are slim. The BLS is not likely to change the way they have been doing business, and they will never want the public, officials, and other economists to doubt their initial numbers.
That leaves us with only one solution: DOGE most of the BLS. It is time for the monthly story of the labor market to be told more clearly, and more reliably, through data from sources like ADP, effectively relegating to history the CES survey which has been such a cumbersome and often misleading echo of what is truly happening.
President Trump and his advisers should have realized all of this and left Biden-appointed Commissioner McEntarfer alone. This approach would have allowed President Trump to continue to pummel her every time numbers are revised, which is nearly every month—scoring political points along the way.
Apologies to my economist friends on staff at BLS, but well-paid government employees aren’t exactly held in high esteem by an American public who cares more about having a job and a good paycheck than unreliable employment numbers.
