Portside

The arrival of Elon Musk’s allies at the Labor Department has sparked fears that the quality of the agency’s reports on everything from inflation to jobs could suffer at the hands of inexperienced outsiders — with global consequences.

With Musk’s Department of Government Efficiency taking a scorched-earth approach at other federal agencies, former stewards of the Bureau of Labor Statistics are warning that its sensitive survey data needs to be protected at all costs. If BLS’ internal workings are politicized — or even perceived that way — it would jeopardize its ability to produce accurate reports that are fundamental gauges of the U.S. economy’s health and can move financial markets everywhere.

“If they access data, it would be very problematic,” said William Beach, who served as BLS commissioner during President Donald Trump’s first administration. “There’s no question about that.”

The Labor Department’s statistical bureau is the source of regular updates that shape how policymakers and Wall Street investors view the economy. Both the Consumer Price Index and the monthly jobs numbers are also key to the Federal Reserve’s interest rate decisions, meaning lower-quality data could give the Fed less visibility as it attempts to avoid both high inflation and high unemployment. (The bureau will release the January CPI numbers at 8:30 a.m. on Wednesday.)

DOGE’s appearance at the Labor Department earlier this month caught federal employees and economists off guard, and Musk’s affiliates have provided little indication of their plans for the agency. Unions representing federal workers — along with the labor-allied Economic Policy Institute — have sued in an attempt to block Musk’s people from accessing all manner of Labor Department data, but a federal judge last week declined to block DOGE’s work.

A spokesperson for Musk’s government efficiency group did not respond to a request for comment.

The calls to protect BLS are preemptive. There is no evidence that DOGE has attempted to interfere with the compilation or presentation of data by the agency. But the government-cutting group has been opaque, with concerns heightened after news trickled out over the past couple of weeks about the level of access DOGE-linked officials have to the Treasury Department’s payments system — which has also been the subject of litigation.

Trump has been a vocal critic of BLS for years and has repeatedly — and without basis — contended that Democratic administrations cooked the books to produce favorable economic reports. He famously backed former GE CEO Jack Welch’s claim that “Chicago guys” had fudged payroll estimates during President Barack Obama’s first term and last year cried foul when BLS published a regularly scheduled revision to monthly jobs tallies under President Joe Biden.

DOGE’s secretive work at DOL has inflamed tensions around how long-standing BLS practices could be threatened by the Trump administration’s broader efforts to take a hacksaw to the federal bureaucracy. While BLS survey data is protected by law, the agency’s allies say anything that would shake the public’s faith in the agency could weaken its effectiveness.

“I see some very big threats. I see threats associated with funding. I see threats associated with personnel. I see threats in the reduction of independence and objectivity,” said Erica Groshen, who led BLS during the Obama administration.

Notably, many of BLS’ best practices “aren’t written into law,” she added. And “if an administration is less careful about laws, they’re going to be even less careful about norms.”

Democratic committee aides and people close to the bureau said they were not yet worried that anyone is interfering with BLS data releases. That’s both because staff at the agency would likely loudly resist tampering and that it would require a high level of expertise to massage the numbers in a way that is believable to the experts who pore over every detail of the releases. Beach also said he’d overseen efforts to segregate BLS’ data from the Labor Department’s other data.

Instead, aides’ bigger concern is that businesses might be less motivated to respond to BLS surveys for fear that confidential data won’t be properly protected. The agency has already been plagued by lower response rates in recent years.

“If it is in the headlines, and businesses hear, ‘If you complete surveys, that information could be accessed in an unsecure way, or shared,’ I would assume that as a small business you would say, ‘Oh, there’s no way I’m going to give this out,’” one aide said. This dynamic would threaten the country’s ability to properly measure shifts in employment, the aide said.

The challenges are further compounded by the fact that statistical agencies — which also include the Commerce Department’s Bureau of Economic Analysis and the U.S. Census Bureau — have faced budgetary and personnel challenges in recent years. Among statisticians, there’s fear that the new administration’s cuts — along with plans to make it easier to fire more federal employees — could create even more uncertainty at those agencies.

“If you can more easily fire people, it introduces a mechanism where you could improperly influence the data,” said Steve Pierson, director of science policy at the American Statistical Association. “If there’s a way to improperly influence the data — even if there’s that perception — it undermines their credibility.”

Sam Sutton (X) is the author of Morning Money, POLITICO’s daily newsletter covering Wall Street, the economy and financial regulation. He previously covered New Jersey health care policy, hospitals and the state's insurance market.

Prior to POLITICO, Sam reported on the private equity industry and public pension funds for Buyouts Magazine and Private Equity International. A Bay Area native, Sam started his career as an intern covering crime, housing and, oddly, county fairs for The Oakland Tribune and other Bay Area News Group publications.

Victoria Guida (X) is an economics correspondent at POLITICO and author of Capital Letter, a reported column that probes policies shaping the American economy and is closely read by policymakers and business executives.

She provides front-line reporting about the people and institutions charged with safeguarding Americans’ wealth and wellbeing, with a particular focus on the Federal Reserve.

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