Josh Marshall on the value of credible data and on the cost of losing it

Josh Marshall has a detailed and extremely well-thought-out reaction to the BLS firing on his Editor's Blog. The whole thing is essential reading, but I want to focus on his conclusions, both because of the way they relate to our post yesterday and how they emphasize a point we've been making for months now.

It’s difficult to capture the magnitude of the importance of government economic data (and other data in different realms). Employment numbers and all government economic data are, taken together, like the instrument control panel for the national economy — for policy makers, markets, corporate decision-makers. Trump’s action injects uncertainty into every decision-making process throughout the economy. It’s not too much to say that credible and consistent economic data is a big driver of prosperity and growth. It allows more informed risk-taking, better informed decisions. But it’s not only these in-the-moment decisions. The revised and final data become the canonical record of what happened. And not just for government. Histories of this era will be written based on that data, economic research, etc.

The impact of this decision is great for the credibility of government financial data which, for most of the last century, has been deemed basically beyond reproach as a systemic, professional and non-politicized record of economic fact. The impact on credibility is already there. What actually happens and how those subsequent actions impact the economy going forward remains to be seen.

It has been obvious since April—and has only grown more so in the following months—that the markets have failed to price in the enormous and growing risks facing the U.S. and world economy under Trump. As we saw again today, every time something happens that makes catastrophe even more likely, the markets will respond with a sharp drop and then go back to “things are fine” mode the next day.

 

 

Many—perhaps most—analysts and commentators are more comfortable discussing market moves as rational reactions to new data, but we are purely in the realm of animal spirits now. To make sense of investor behavior in the summer of 2025, you have to think in terms not just of market psychology, but of dysfunctional market psychology, using concepts like denial, cognitive dissonance, or battered spouse syndrome.

JPMORGAN, on Trump firing the BLS chief: “.. It is unlikely such a policy action will rejuvenate job creation or bolster confidence. Rather, the risk is that markets begin to question the validity of US macro data, including the CPI data that are the inputs to the $2.1tn TIPS market.”

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— Carl Quintanilla (@carlquintanilla.bsky.social) August 4, 2025 at 12:04 PM