Disbanding committee threatens US economic data integrity

The Federal Economic Statistics Advisory Committee has been disbanded, raising concerns about the reliability of U.S. economic data. Erica Groshen, a former Commissioner of the Bureau of Labor Statistics, expressed her surprise and worry after receiving the announcement on March 4th. Groshen noted that the message was brief and unsettling. The committee's role was to provide advice to important economic agencies like the Bureau of Labor Statistics and the Bureau of Economic Analysis. This was crucial for ensuring accurate and timely reports for the country’s economy. The committee's annual budget was $120,000. Groshen pointed out that this is a small amount compared to larger budget cuts being considered by the government. She highlighted the importance of trust in statistical reporting. For economic data to be valuable, people must believe it is produced objectively and without outside influence. Her concerns grew as the disbanding appeared to create opportunities for potential manipulation of data for political purposes. This was particularly relevant as Commerce Secretary Howard Lutnick recently announced plans to change how Gross Domestic Product (GDP) is calculated, aiming for a more accurate economic picture. While Groshen has not seen direct evidence of data manipulation, she fears that eliminating the committee weakens the safeguards necessary to prevent it. She stressed that there are many ways the data methodology could be altered.