Big Take Market-Moving US Economic Data Is Under Threat
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Dec 26, 2024 
Molly Smith, Bloomberg's economics editor, and William Beach, former BLS commissioner, discuss the significance of U.S. economic data and the challenges it faces. They delve into the potential impact of funding cuts on agencies like the Bureau of Labor Statistics, which may lead to unreliable unemployment figures. The conversation also highlights the innovative approaches needed to improve data collection, while underscoring the importance of accurate data for market decisions and community planning. Will the integrity of crucial economic data hold up?
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Economic Data's Importance and Threat
- US government releases market-moving economic data monthly, impacting policies and the Federal Reserve's decisions.
- These agencies struggle with limited funding, worsened by potential budget cuts.
Shrinking Sample Size
- The Bureau of Labor Statistics' survey sample size is shrinking due to budget cuts.
- This raises data integrity questions and impacts the representation of various demographics.
2008 Financial Crisis Data Mishap
- In 2008, underestimated economic contraction led the Federal Reserve to hold back on rate cuts.
- Initially, GDP shrinkage was estimated at 3.8%, later revised to 8.9%.