US economists fear for future of ‘gold standard’ statistics amid Doge cuts

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Economists are worried about the Trump administration’s deep cuts to the federal government — and not just because they’re worried about their own jobs.

Slashing the federal workforce and research funding threatens the quality and credibility of “gold standard” US statistics, economists have warned.

The impact could be felt across Wall Street’s $105tn stock and bond markets. The data — from the jobs report to inflation indices — can swing markets in milliseconds. These flagship reports also underpin policies that influence the trajectory of the world’s biggest economy.

Ricardo Reis, a London School of Economics professor, who is a consultant at the Federal Reserve Bank of Richmond told the FT:

“All of the cuts in federal funding and some of the ones you’ve seen come out of Doge . . . they’re often a death blow to already very stretched survey operations.”

Already, commerce secretary Howard Lutnick has closed the Federal Economic Statistics Advisory Committee, sparking concern among economists polled by the University of Chicago’s Booth School of Business and the FT earlier this month.

More than 90 per cent of the respondents to the FT-Chicago Booth poll said they were either “a little” or “very” worried about a decline in the quality of US economic data, in part due to the closure of the FESAC.

Lutnick has also suggested that his department produce a measure of GDP that strips out government spending — which goes against international norms. The proposal has triggered apprehension over whether political officials will try to influence economic reporting.

“The US has always been the gold standard on data, especially on things like GDP, the labour force, prices,” said Stephen Cecchetti of Brandeis University and former head of the economic and monetary department at the Bank for International Settlements.

“It’s been the gold standard because the society and the government supported and believed in measuring things as accurately as possible,” he added.

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When Bethany of Bogalusa, Louisiana, welcomes into the world her third child — due next week — she plans to rely on Medicaid for the cost of delivery.

The government health insurance for people on low incomes has become essential to her family. So she’s been surprised about talk around potential cuts to the programme, which serves one in five Americans.

“It never came up in the [presidential] campaign . . . I don’t think people saw it coming,” said Bethany, who voted for Trump in November.

What was a prominent issue on the president’s campaign, however, were tax cuts. To pay for those reductions, Republicans in Congress passed a budget that includes huge cuts to spending.

And in ruby red Louisiana, a relatively poor state with one of the highest proportions of people on Medicaid, there’s a very real fear that people will suffer as a result.

“Any cuts would be very impactful,” said Maria Christina Buenaflor, an obstetric gynaecologist at Our Lady of the Angels hospital in Bogalusa. “Upwards of 60 per cent of the women who deliver here are on Medicaid.”

EJ Kuiper, chief executive of the Franciscan Missionaries of Our Lady Health System, which runs the Bogalusa hospital, told the FT’s Guy Chazan that more than 40 hospitals in Louisiana are at risk of closing if Medicaid funding is reduced.

“If anything close to what is being contemplated now would actually pass, these Congressmen and women would go back to districts where hospitals are going to get shuttered,” he says. “So they’d better plan for a future beyond politics.”

Over the next few months, Trump will have to find a way to balance the interests of both the fiscal hawks and his billionaire allies who want to radically downsize the federal government, and his working-class Maga base, which has become heavily reliant on government support.

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