The Trump administration plans to cut the budget of the Bureau of Labor Statistics, putting the quality of economic data at risk

As the U.S. Bureau of Labor Statistics has struggled for years with budget cuts, the Trump administration is preparing to take another slice: cutting budgets and personnel. This could make the economic data that Wall Street relies on most even less reliable.

On June 4th, according to a budget briefing document from the U.S. Department of Labor, the Trump administration's budget proposal for fiscal year 2026 will cut the budget and staffing of the Bureau of Labor Statistics (BLS) by about 8% each. Faced with such significant cuts, the BLS will be forced to concentrate resources on core data known as "major federal economic indicators," such as the monthly employment report and the consumer price index. The Department of Labor's budget briefing clearly states:

"At existing funding levels, in order to achieve cost savings beyond what the restructuring proposal can bring and prioritize the most critical tasks necessary for producing core data series, the BLS will refocus on producing statistical project data that belongs to major federal economic indicators (PFEIs), statutory requirements, or current legal uses."

Some analysts point out that this "refocusing" actually means a large number of equally important economic statistics will face the fate of being cut.

It is noteworthy that the Trump budget proposal also suggests restructuring the BLS under the Department of Commerce, merging it with the Bureau of Economic Analysis and the Census Bureau. According to the Department of Labor's budget briefing document, this move will be more efficient in terms of time and cost while improving data quality.

Data Quality is in Crisis

In fact, the U.S. Bureau of Labor Statistics has been struggling for years with a budget that has been continuously declining after adjusting for inflation.

It is worth noting that during previous layoffs at DOGE, the BLS has already lost a significant number of personnel through delayed resignations, early retirements, and normal attrition, and the current federal agency is still under a hiring freeze.

With the already reduced budget, combined with personnel losses and the hiring freeze, the collection of some economic data in the U.S. has been affected.

The BLS recently announced that it was forced to reduce the number of survey sites for the consumer price index due to "certain CPI city personnel shortages," and has currently stopped collecting data in Lincoln, Nebraska; Provo, Utah; and Buffalo, New York. UBS economist Alan Detmeister and others warned in a report on Wednesday:

"The reduction in the number of price quotes may reduce the reliability of the CPI as a measure of inflation and increase the volatility of monthly CPI data."

The BLS attempted to soothe market sentiment in a statement on its website, claiming that these adjustments "should not affect the overall CPI index," but acknowledged that "it may increase the volatility of smaller series."

In addition, the U.S. Bureau of Labor Statistics had previously announced adjustments to the producer price index, stating that it would stop calculating and producing 350 indices when releasing the July PPI in August. Although a spokesperson stated that these indices account for less than 1% of the total PPI, and the impact on the accuracy of the final demand index for PPI is "negligible," this trend is concerning.

The agency also stated frankly, "When existing resources can no longer support data collection efforts, the BLS will make cuts."