Importance of the U.S. Bureau of Labor Statistics and Critical Issues It Faces

By Groshen, Erica L. | Business Economics, April 2018 | Go to article overview

Importance of the U.S. Bureau of Labor Statistics and Critical Issues It Faces


Groshen, Erica L., Business Economics


Abstract The U.S. Bureau of Labor Statistics (BLS) provides essential, trustworthy, highly visible statistics that promote economic efficiency. However, its ability to do so is threatened by many challenges, chief among which is its funding situation. This article updates important stakeholders, such as those at NABE, on the situation at BLS. The paper reviews evidence on the vital role played by BLS products, how BLS maintains high data integrity, and evidence of users' trust in the data. This is followed by discussion of the agency's continuous efforts to improve efficiency. Despite the agency's importance and efficiency, its funding has been flat in nominal terms since 2009, leading to a $90 million shortfall (15% below that needed) in real terms by FY2018. The BLS has needed to curtail spending in ways that are not sustainable, slowing modernization and raising the risk of data errors or delayed releases. With adequate funding, BLS could greatly speed modernization and better serve its customers in many ways. The paper concludes with a call to action: steps that NABE economists and other data users should take to help assure that BLS continues to provide the data that we all need in order to preserve our national vitality.

Keywords Statistics * Labor market * Data * Inflation * Bureau of Labor Statistics (BLS) * Indicators

1 Introduction

Accurate, timely, and readily available statistics are an essential public good in a democratic nation and free enterprise economy. Such statistics help government and private entities make better decisions, producing a more vibrant and efficient economy. By the same token, lack of such statistics, or poor-quality statistics, can lead to bad choices that waste public and private resources and make people's lives worse.

For the United States, the Bureau of Labor Statistics (BLS) produces vital information about jobs and unemployment, wages, working conditions, and prices. A part of the Department of Labor (DOL), the BLS is the second largest, and oldest, statistical agency within the Federal government. For more than 125 years, the BLS has collected, analyzed, disseminated, and improved essential economic information, serving as a key pillar of the knowledge infrastructure of the nation.

While I served as the 14th Commissioner of I he BLS (from January 2013 to January 2017), I learned much about the agency that I think most data users should know--including the urgency of its funding situation. This article represents an effort to bring my non-BLS colleagues up to speed by organizing and sharing that information in a single document. The first two sections review evidence of the high importance and visibility of BLS data. The third section discusses how BLS maintains data integrity, followed by discussion of evidence of user trust. The fifth section talks about the agency's continuous efforts to improve efficiency. The sixth part reviews the recent funding history, and the following one discusses what BLS could do with more adequate funding. The final section concludes with what NABE members and other data users can do to help assure that BLS continues to provide that data that we all need in order to preserve our national vitality.

2 Importance of BLS data

The importance of BLS data lies in its use for consequential policy and private decisions. See Appendix 1 for numerous example of uses and users of BLS data, and Appendix 5 for a list of BLS programs, offices, acronyms, and links. This section highlights a few key illustrations.

To begin, the Federal Reserve System's (Fed) dual mandate requires it to pursue price stability and full employment. The BLS produces the most visible inflation measures: particularly the Consumer Price Index (CPI), but also the Producer Price Indexes (PPI), Employment Cost Index (ECI), and U.S. Import and Export Price Indexes (MXP). The Fed gages proximity to full employment by tracking nonfarm payroll jobs from the Current Employment Statistics (CES) and unemployment rates from the Current Population Survey (CPS). …

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