Massaging the Numbers

Economy bulletin

On Friday, President Donald Trump wrote a Truth Social post to fire Erika McEntarfer, head of the Bureau of Labor Statistics (BLS), after a jobs report showed sharply weaker employment growth and large downward revisions for May and June: the July report showed only 73,000 new jobs and a rise in unemployment to 4.2%. May and June job gains were revised down by a combined 258,000—the largest non-pandemic adjustment since 1979. Trump criticized the revisions as implausible, politically biased, and “rigged” to make him look bad, while accusing McEntarfer, a Biden appointee, of politically manipulating the data but provided no evidence. Labor Secretary Lori Chavez-DeRemer confirmed her removal, with Deputy Commissioner William Wiatrowski named acting director.

The move sparked concern over the politicization of trusted economic data—traditionally considered nonpartisan and critical to financial markets, which dropped after the report’s release. Critics, including economists and former officials, warned that this unprecedented move threatens the credibility of U.S. economic data. Former Treasury Secretary Larry Summers likened the act to authoritarian behavior, and experts stressed the danger to public trust.

Of course, McEntarfer was no stranger to downward revisions during the Biden Administration—as the Trump White House hastened to point out—coming under heavy criticism for a pattern of significant data inaccuracies and operational failures that, according to critics, undermined public trust in one of the federal government’s most vital economic agencies. During her tenure, the BLS repeatedly published overly optimistic job growth numbers that were later revised sharply downward. In one instance, a major benchmark revision in 2024 reduced job growth by 818,000—marking the second-largest correction on record. Taken all together, over 1.18 million jobs were reportedly overstated across various months. These flawed reports had wide-reaching consequences, including influencing the Federal Reserve to delay interest rate cuts based on an inaccurate picture of labor market strength.

In addition to the statistical errors, the BLS under McEntarfer faced a series of technical and procedural failures. Sensitive data was leaked prematurely on multiple occasions, including to Wall Street firms that reportedly gained early access to unreleased figures. The agency also experienced delays in public data releases and internal communication breakdowns that further eroded confidence. These incidents occurred at critical times, such as just before major Fed policy announcements, intensifying market sensitivity to any perceived bias or mishandling.

The cumulative effect of these missteps led to escalating scrutiny from lawmakers. Republican leaders in the House, including the Education and the Workforce Committee, launched oversight inquiries, accusing the BLS and the Biden Administration of manipulating data to present a more favorable economic outlook. Reports from Bloomberg, The Heritage Foundation, and other outlets reinforced concerns about the agency’s credibility. Accordingly, the Trump Administration and its supporters argue that McEntarfer’s removal was necessary to restore the integrity of government labor statistics and ensure that future data is free from political influence and operational error.

But it’s worth noting that, even prior to downward revisions, the official unemployment figures—the U-3 rate—already comes with significant drawbacks when used as an economic indicator, since it includes only those who are unemployed and actively seeking work. Accordingly, it fails to capture the full extent of labor underutilization, as it excludes discouraged workers—those who have stopped looking for work—and part-time workers who want full-time jobs. In contrast, the U-6 unemployment rate offers a more comprehensive measure of unemployment, including not only those counted in U-3 but also discouraged workers, marginally attached workers, and those working part-time for economic reasons.

Because of this wider scope, the U-6 rate is always higher than the U-3 and is seen by many economists as the truer reflection of labor market conditions: for example, during the coronavirus pandemic in September 2020, the U-3 rate was 7.9%, while the U-6 rate was significantly higher at 12.8%. Since it captures more of the “hidden unemployment,” the U-6 represents a valuable tool for understanding labor market dynamics beneath the surface; therefore, despite the prominence of U-3 in the media, many economists argue that U-6 should be given more weight when evaluating the true health of the job market.

Still, with the U-6 rate at 7.9% in July 2025 compared to a U-3 rate of 4.2%, the statistics on unemployment aren’t even close to what we’d call catastrophic. However, we should temper that assessment with the May 2025 analysis from the Ludwig Institute for Shared Economic Prosperity (LISEP) finding that the bottom 60% of American earners don’t make enough to afford a basic standard of living, estimating the rate of “functional unemployment” at over 24%—describing those with annual incomes of less than $67,000 (and averaging only $38,000) who can’t afford costs beyond essential food and housing for products and services like education, healthcare, technology, and professional needs.

Product of stable diffusion (“The ‘functionally unemployed’ who can't afford a basic cost of living trying desperately to balance a household budget.”)

But even if you hold the U-3 and U-6 as useful figures, they remain lagging indicators—meaning they respond to economic changes after they occur—and U.S. economic forecasts have grown increasingly uncertain. With a tariff deadline looming, dozens of countries face potential U.S. tariffs up to 50%, though the administration has granted Mexico a 90-day extension and struck deals with other nations, such as South Korea. Trump claims the tariffs are enriching the U.S., but economists remain skeptical.

Jason Furman, former head of the Council of Economic Advisers under Obama, argues that while the economy hasn’t collapsed, the U.S. is showing signs of stagflation—slow growth and rising inflation. Tariffs have contributed to increased prices for consumer goods like furniture, toys, and electronics. Although initial fears may have been overstated, Furman stresses tariffs are still economically harmful and a poor method of raising revenue.

Consumer inflation is beginning to rise again, especially in areas directly impacted by tariffs. Companies are responding differently—some like Procter & Gamble are raising prices, while Walmart is cutting them. Furman notes that major industries like autos can’t indefinitely absorb higher costs without passing them on to consumers.

Although the White House has secured some trade deals, Furman cautions against viewing them as victories. He says the economic damage from U.S.-imposed tariffs outweighs the benefits of foreign concessions, and while a full-scale global trade war has been avoided, the current strategy still harms American consumers and businesses. The U.S. Chamber of Commerce warns that tariffs are placing a significant burden on U.S. small businesses, which make up over 97% of the country’s importers. While intended to combat unfair trade practices abroad, the rising costs from tariffs are hitting small retailers hardest, forcing many to raise prices, reduce product offerings, or absorb the added costs—often at the expense of profitability and growth. The National Retail Federation warns that these challenges not only threaten the survival of small businesses but also impact local economies, as small businesses account for nearly half of all private-sector jobs in the U.S.

Of course, Trump’s tariffs don’t just increase uncertainty for the U.S. economy, but for global trade. At the 30th anniversary of the World Trade Organization (WTO), marked earlier this year in Geneva, Director-General Ngozi Okonjo-Iweala emphasized the organization’s importance as a stabilizing force amid growing turmoil—particularly due to Trump’s aggressive protectionist measures, including broad “Liberation Day” tariffs and country-specific duties. These moves have disrupted supply chains, raised costs for U.S. consumers, provoked retaliatory tariffs, and challenged the WTO’s authority, escalating longstanding criticisms of the institution.

Trump’s actions represent the most protectionist U.S. stance since the 1930s. He argues that decades of trade liberalization, especially since China’s WTO accession in 2001, have hollowed out American industry and hurt workers, and further accuses the WTO of favoring China through “developing country” status and lax enforcement of trade rules. While China is often cited for distorting trade through subsidies and quotas, it continues to benefit from WTO protections. Accordingly, his supporters see tariffs as a way to reshore jobs and rebalance trade.

These critiques, however, predate Trump. The WTO has faced global backlash since the 1999 “Battle in Seattle,” when 50,000 protesters decried corporate influence and the organization’s ability to override domestic labor and environmental standards. Over time, workers in wealthy nations and leaders in developing countries alike have grown disillusioned. Developing nations argue that WTO rules block industrial growth, and permit rich countries to subsidize their own industries while restricting such support in poorer nations.

Internally, the WTO is weakened by its consensus-based system and the U.S.'s deliberate obstruction. Trump paralyzed the WTO’s dispute resolution mechanism by blocking appointments to its Appellate Body—a standoff that continued under President Biden. The result is a global trade body unable to enforce its own rules. This impasse was underscored when the WTO ruled Trump’s steel tariffs illegal, but the Biden Administration refused to remove them.

Accordingly, the WTO now faces an existential crisis. Without effective enforcement, countries may increasingly violate trade rules, opting instead for bilateral deals and escalating tariff wars. While some hope for reform that better addresses both North-South inequalities and modern economic challenges, others fear the organization is sliding into irrelevance. As Okonjo-Iweala optimistically calls for renewal, many observers warn the WTO’s future remains uncertain—and possibly bleak.

As debates over trade, data integrity, and economic leadership intensify, the stakes are not just about short-term job numbers or tariff rates—they are about the credibility of American institutions and the rules-based order that underpins the global economy. While the Trump Administration frames McEntarfer’s removal on Friday as a corrective measure to restore credibility to federal labor data, critics view it as an unprecedented political intrusion into a historically nonpartisan agency—raising fears about the erosion of institutional independence under authoritarian overreach. But in the grand scheme, that unceremonious firing, amid the escalating use of tariffs with potentially frightful domestic repercussions, represents only an ancillary detail in an increasingly turbulent chapter for the global economy.

While tensions with international trade institutions grow, the administration’s aggressive protectionist agenda contributes to inflationary pressures, global trade uncertainty, and growing strain on small businesses at home. Despite scattered trade deals, the broader economic consequences of these policies—ranging from distorted market signals to weakening trust in global institutions like the WTO—are becoming harder to ignore.

Thus, some more imaginative observers (like us here at Radio Free Pizza) may therefore speculate that the Trump Administration isn’t just working to reconfigure the U.S. domestic economy—as we suggested while first exploring Trump’s tariffs in February—but, indeed, plans to reconfigure the global capital order. If that’s the case, then what may seem like erratic trade policy could, in hindsight, reveal itself as the scaffolding of a deliberately engineered rupture—one meant to fracture the prior Western consensus and unapologetically usher in a new world system, as we touched on in our¹ three-part² exploration³ of the nascent North American Union from January. What may come of this, perhaps no one can know for sure, but you can count on us here at Radio Free Pizza to keep tracking it.

1. “All Over the Map” (12 January 2025)

2. “Abandoned Borders” (15 January 2025)

3. “Enemies Among the Three Amigos” (19 January 2025)