Powell warns about data erosion; members raise concerns about BLS, EIA and OFR cuts
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Summary
Chair Jerome Powell told the House Financial Services Committee that, while current official data remain adequate for Fed policymaking, he is concerned about a "direction of travel" toward smaller surveys and weaker measurement that could reduce precision. Members cited cuts and proposed cuts at the Bureau of Labor Statistics, the Energy
Several members asked Chairman Powell about the quality and sufficiency of official economic data.
Powell said he was "not concerned about the data today" but that he is worried about the "direction of travel"—shrinking survey scope and coverage—because careful measurement of the economy is critical to monetary policy. He noted that response rates to some surveys have fallen and that maintaining and improving statistical collection is a worthwhile public investment.
Members raised specific agencies: the Bureau of Labor Statistics (BLS) (concerns about staff and potential funding cuts), the Department of Energy's Energy Information Administration (EIA) and the Office of Financial Research (OFR). Powell said Fed operations do not depend on any single private dataset and that public sector data remain the gold standard, but he observed that private data sources have become more prominent and that reduced public data capacity would make analysis and policymaking harder for government and private actors alike.
Powell said the Fed will continue to use public and private data sources and monitor changes; he urged policymakers to prioritize measurement capacity. Several members asked for written follow-ups.