Banking Magnate from Bank of America Comments on Dismal Employment Data Which Triggered Trump's Dismissal of BLS Chief
The Bank of America CEO, Brian Moynihan, has expressed concerns about the reliability of traditional employment data tracking methods, such as those used by the Bureau of Labor Statistics (BLS). In a recent interview on CBS News' "Face the Nation with Margaret Brennan," Moynihan suggested that advances in technology, including artificial intelligence, could offer a more immediate and accurate reflection of labor market dynamics.
Traditional BLS methods rely heavily on employer and household surveys to collect employment data, which have seen a significant decline in response rates. According to Moynihan, these declining response rates undermine the reliability of the data collected. In contrast, Bank of America does not depend on these surveys. Instead, the company uses internal data on employment, productivity, transactional data, and other operational metrics to assess labor market conditions.
Moynihan also highlighted the transformative impact of technology on work and employment composition, suggesting that new tools can improve understanding of how jobs evolve. This could potentially offer more real-time or granular employment data than traditional survey methods.
The controversy surrounding the BLS has been heightened by the recent firing of the Bureau's commissioner, Erika McEntarfer, by President Donald Trump. Trump accused McEntarfer of manipulating jobs figures for political purposes, a claim that McEntarfer vehemently denied. The president has stated that he will pick an exceptional replacement for the BLS commissioner.
The BLS reported that the U.S. economy added 73,000 jobs in July, which was well below the estimated gain of 110,000 jobs by economists polled by LSEG. The report also showed "larger than normal" downward revisions to job gains for May and June, reducing the reported employment levels by 258,000 jobs. Trump claimed that these job numbers were the "biggest miscalculations in over 50 years."
Moynihan expressed concern about the large restatements of the jobs report, going back five or seven years during the pandemic, creating doubt around the data. He emphasised the need for the BLS's data to be more resilient, predictable, and understandable.
The confirmation of McEntarfer as BLS commissioner in January 2024 was a broadly bipartisan vote of 86-8 in the Senate. However, the controversy surrounding her firing has raised questions about the independence of the BLS and the accuracy of its data.
Meanwhile, Bank of America continues to rely on its data to gauge what businesses and consumers are doing, providing an alternative approach to the traditional survey-based employment data collection used by the BLS. The company's approach reflects concerns over survey response decline and the changing nature of work driven by advances like AI.
- The CEO of Bank of America, Brian Moynihan, has expressed concern about the reliability of data collected by the Bureau of Labor Statistics (BLS), which uses traditional employment data tracking methods that have seen a significant decline in response rates.
- Moynihan suggests that advances in technology, such as artificial intelligence, could offer a more immediate and accurate reflection of labor market dynamics compared to the BLS's survey-based methods.
- In contrast to the BLS, Bank of America uses internal data on employment, productivity, transactional data, and other operational metrics to assess labor market conditions, reflecting concerns over survey response decline and the changing nature of work driven by technological advances.
- Politicians, economists, and business leaders are debating the independence and accuracy of the BLS following the controversial firing of its commissioner, Erika McEntarfer, and concerns about large restatements in the jobs report's data, particularly during the pandemic.
