Staffing shortages maybe effecting the accuracy of key economic markers like the U.S. inflation data, according to a Wall Street Journal report.
“The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices,” the Journal said.
Checking fewer prices means the data could be skewed or just flat out wrong.
“When you take a sample and reduce the numbers, it’s going to increase the sampling error,” Economist Alan Detmeister told the Journal. “We don’t know if this is a big issue or a small issue, but we just know that directionally, it’s making things worse.”
The Journal notes, “There is no sign of an intentional effort to publish false or misleading statistics. But any problems with the data could have major implications for the economy.”
Having an accurate inflation rate is essential to track how healthy our economy is. The data is used to determine the annual increase in social-security benefits and what tax bracket you land in.
“Businesses, investors, and policymakers rely on the reading to guide their decisions,” the outlet said. “The Federal Reserve is laser-focused on inflation data when it sets interest rates for the country.”
Earlier this year, Federal Reserve Chair Jerome Powell said, “Being able to track what’s going on in the economy is very, very important. It’s something that the United States has led in for a long, long time, and something we need to continue to lead in.”
According to the Journal, “A handful of economists noticed quirks in the April data published May 13. When some asked the Bureau of Labor Statistics for more information, government officials sent back an excerpt of an internal report.”
The Bureau of Labor Statistics and the Labor Department did not respond to the Journal’s request for comment.