Federal Reserve officials rely on government data to make crucial decisions about interest rates. Similarly, Congress and the White House use this data to determine policies on jobless benefits and stimulus payments. Investors also heavily depend on monthly reports regarding job growth, inflation, and retail sales for their financial strategies.
A recent study by the American Statistical Association raises concerns about the integrity of government statistics. While the current data is considered reliable, the report highlights potential risks such as shrinking budgets, declining survey response rates, and the threat of political interference.
The study, titled “The Nation’s Data at Risk,” emphasizes the importance of safeguarding statistics produced by the federal government, including data on education, health, crime, and demographic trends. The authors compare the statistical system to essential physical infrastructure, underscoring the need to address vulnerabilities before they escalate.
Nancy Potok, former chief statistician of the United States and one of the report’s authors, warns of a possible downward spiral in the data’s quality if proactive measures are not taken. She notes that while the threat is not imminent, it could materialize in the near future without intervention.
Of particular concern are economic data, given its significance to policymakers and investors. Much of this data relies on surveys of households and businesses, but response rates have been dwindling. For instance, the response rate to the Current Population Survey, a key source for labor force statistics, has dropped to around 70 percent from nearly 90 percent a decade ago.
