Bridgewater Associates founder Ray Dalio says the US government needs to rethink how it comes up with its economic data.
Over the weekend, President Donald Trump fired the head of the Bureau of Labor Statistics, Erika McEntarfer, because of a large downward revision of job numbers.
On Friday, the BLS revised down the job growth figures for June from 147,000 to 14,000, a 90% drop.
Figures for May were also revised down from 144,000 to 19,000, bringing the combined two-month downward revision to 258,000 jobs.
Some analysts at US banks began citing the data as possible evidence suggesting the economy was slowing down and flashing potential recession signals.
Despite the controversy over firing the BLS Commissioner, in a post on the social media platform X, Ray Dalio says he would have fired her, too.
“I probably would have fired the head of the Bureau of Labor Statistics too.
That’s because its process for making estimates is obviously obsolete and error-prone, and there is no good plan in the works for fixing it. The huge revisions in Friday’s employment numbers are symptomatic of this, especially because the revisions brought the numbers toward private estimates that were in fact much better.
I assure you that this is something that I know a lot about because of how I use data to follow the economy and bet on where it’s going.”
Dalio says if Trump indeed fired the BLS chief purely for political reasons, that may be a “big problem.”
Therefore, the investor says, “It would be good if President Trump made his thinking clear.”
“In any case, we do need big renovations to the ways the government estimates what’s going on in the economy to make them more, not less, accurate.”
Generated Image: Midjourney
