J.P. Morgan warns of economic risks from politicisation of U.S. labor data | investingLive

J.P. Morgan’s North America Economic Research team has raised alarm over the dismissal of Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer, warning that it risks undermining the integrity of U.S. economic data and, by extension, the conduct of monetary policy and financial stability.

In a note titled “Concerning News from the BLS,” the bank cautioned that while much of the recent focus has been on potential politicisation of the Federal Reserve, an equally troubling development is the threat to the objectivity of federal data collection itself.

“To borrow from the soft-landing analogy, having a flawed instrument panel can be just as dangerous as having an obediently partisan pilot,” the note read, warning that compromised data would leave policymakers flying blind.

J.P. Morgan also pushed back against any notion that private-sector data could act as a viable replacement for official statistics. While the rise of alternative “big data” indicators has been notable over the past decade, the bank noted that such metrics are often benchmarked to federal sources and typically lack nationwide representativeness. Even small shifts in market share among data providers, it said, can distort macroeconomic signals — a problem federal data is specifically designed to avoid.

The analysts concluded that preserving the independence and integrity of institutions like the BLS is vital for sound economic decision-making, particularly at a time of heightened policy sensitivity.