Golden Fleece Award

WASHINGTON, D.C. - Rep. French Hill (AR-02) named the United States Department of Labor (DOL) as the latest recipient of his Golden Fleece Award for their uninvolved administration of the Bureau of Labor Statistics (BLS) after a year of fumbled public communications and data releases.

Rep. Hill said, “This year, the Bureau of Labor Statistics has botched the release of two important data releases on job growth and consumer economics and created a flurry of confusion by putting out and then retracting misleading information about the calculation of inflation. It was only after the third of these mishaps, under political pressure that some of their information might try to represent the Biden economy as stronger than it was, that the Department of Labor finally stepped in to conduct an internal review of what went wrong in these incidents. BLS incurred their first reportable release in over a decade, and their lack of focus on the presentation and communication of their public releases has damaged their public perception, harmed their ability to report accurate information in the future, and allowed some actors to access information that informed Wall Street responses faster than others. BLS’s lack of attention to the dissemination of their work undermines their credibility and confidence in government statistics as a whole, in addition to demonstrating favoritism to ardent followers over the fair and equal release of information to the public. While the review found that these incidents were isolated and not politically motivated, consumer trust of BLS data has eroded.”

In a letter to DOL Acting Secretary Julie A. Su, Rep. Hill writes:

I write today to inform you that the U.S. Department of Labor (DOL) is the most recent recipient of my Golden Fleece Award. I am awarding this to DOL for your department’s ineffective administration of the Bureau of Labor Statistics (BLS), which mishandled several releases of sensitive economic data and methodological information throughout this past year.

BLS is the federal government’s principal fact-finding agency in labor economics and statistics. BLS collects, processes, analyzes, and disseminates data about labor market activity, working conditions, and price changes in the economy to the public, Congress, Federal agencies, State and local governments, and businesses. Many of the indicators that BLS produces are used by other federal programs to allocate funding or institute cost-of-living adjustments, making quality, accessibility, and impartiality paramount to its mission.

On September 27, 2024, you established an 11-member Team of Experts to conduct an inquiry into three separate incidents and to publish a report within 60 days focused on formal data releases and customer service. On November 25, 2024, the Team released their findings; while the Team identified that each incident was unrelated and did not involve the integrity of BLS’s work, they still provided 86 recommendations to preserve trust in BLS and ensure that information shared by the agency is available to all.

The first of the three instances happened in February 2024, when a BLS staff member sent an email to a group of about 50 external users, improperly dubbed “super users”, to explain methodological information that helped clarify part of the Consumer Price Index (CPI) for January 2024. This “email about an obscure detail in the way the government calculates inflation set off an unlikely firestorm … [that] had an immediate impact”. While the impact of the email on market movements remains unclear, “[t]o the inflation obsessives who received the email — and other forecasters who quickly heard about it — the implication was clear: The pop in housing prices in January might have been not a fluke but rather a result of a shift in methodology that could keep inflation elevated longer than economists and Federal Reserve officials had expected. That could, in turn, make the Fed more cautious about cutting interest rates.”

In response to the original email to the “super users”, BLS sent a follow-up email asking those who received the email to disregard the email, released public statements denying a list of “super users”, called the email a mistake, and finally held an online seminar explaining how the agency calculates housing inflation and the effect of methodological changes. Then, after data for February was released, it showed that the January data was mostly an anomaly, putting BLS “in a very awkward position” since “every inflation data point… even subtle details can move markets.”

The second incident occurred in May 2024, when five files related to the CPI and Real Earnings data were released on BLS’s website 32 minutes before their scheduled release after a second safeguard failed to stop the early release of the data. This was BLS’s first reportable release incident in over 10 years. The data, one of the one of the highest-profile monthly economic reports, is closely monitored by investors – more so than by the average consumer or general public. It “was posted to a part of the bureau website that is used by sophisticated analysts, who download the agency’s data automatically. That meant that many investors, in effect, had access to the data before the general public.” This is concerning not only because it gave certain users advance information but also because the price index, as a “principal federal economic indicator,” carries additional protections to ensure the numbers are not shared prematurely.

The third incident occurred on August 21, 2024, after the Current Employment Statistics preliminary benchmark revision was not posted online until 32 minutes after its scheduled time due to technical challenges, during which time some staff disclosed information that had not yet been publicly posted when responding to phone call inquiries. This event “allowed some investors to [obtain] potentially market-moving employment data before the public,” including banks like Goldman Sachs and Nomura and other Wall Street research firms. After the scheduled 10 a.m. release time expired, numerous analysts called BLS asking for the data directly and received it, while others who called were left waiting. Minutes later – and still before the numbers were posted by BLS – the correct downward revisions to job growth were circulating on social media.

Further, the August job growth revision number was the largest downward revision since 2009, informed the Federal Reserve Board’s assessment of the economy and labor market and their subsequent regulatory actions, and was the subject of political scrutiny during the Presidential election. As the Team acknowledges, “how successfully BLS releases its data products and supporting materials impacts the public’s perception of the credibility of the data”. While economists and experts continue to receive BLS’s data as reliable, these kinds of problems undermine confidence in the agency and government statistics as a whole. If individuals begin to distrust BLS data, fewer businesses and households will likely respond to crucial surveys less, leading to less-accurate data.

These incidents highlight the Bureau of Labor Statistics’ lack of focus on the presentation and communication of their work. The Teams of Experts’ report attributed two of these three incidents to human error and one to a technology update glitch, but the problems generated by these examples cannot be undone. As the Department of Labor continues to conduct oversight and respond to the issues that caused these episodes, I encourage you to understand the ramifications that BLS clumsiness has on public trust, economic market responses, and preserving accurate information in the future. I acknowledge that the Team found and recommended the need for Congressional funding to modernize BLS technology and software that played a role in these errors; if you concur with those recommendations, I encourage your department to be prepared to justify that in its budget request to Congress and to explain how future appropriations will mitigate the risks of similar incidents happening again.

I am committed to ensuring effective fiscal practices at our Nation’s federal agencies. Should you require any additional authority from Congress to address these concerns, I urge you to notify us as soon as possible. I would also welcome any technical assistance you could provide to Congress to correct statutory issues that may have contributed to this problem. Thank you for your consideration and I look forward to working with you to address this important issue.