Inflation Data in Jeopardy: Impact of Federal Hiring Freezes
Federal hiring freezes from the Trump administration have caused staffing shortages within the Bureau of Labor Statistics, affecting data collection for U.S. inflation measures. The Bureau has reduced the number of businesses sampled for the Consumer Price Index, raising concerns about data quality and its impact on economic policies.
The Bureau of Labor Statistics, the economic statistics arm of the U.S. Labor Department, has curtailed its data collection due to staffing shortages, a consequence of hiring freezes imposed during the Trump administration. According to the Wall Street Journal, this reduction affects the important Consumer Price Index (CPI), a key measure in tracking inflation rates.
An email disclosed that the CPI has temporarily lowered its data-gathering efforts, including the number of outlets from which it collects price quotes in major cities. The changes are set to remain until the freeze is lifted, enabling fresh recruitment and training within the bureau. This development has caused concern among economists who rely heavily on the CPI data.
Notably, some economists, such as Omair Sharif from Inflation Insights, argue that the quality of economic data might deteriorate due to these staffing constraints. Sharif emphasizes the significance of such indicators in shaping national economic policies, which ultimately affect everyday citizens. Amidst Trump's tariff policies, the focus on inflation data intensity remains significant as it could lead to further economic fluctuations.
(With inputs from agencies.)
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