Firms boost economic data products as trust in official US statistics wanes

By Augusta Saraiva

 

Private-sector companies are beefing up their alternatives to US government statistics, seizing a moment of uncertainty around federal data.

 

One platform is providing its data free to the public, a major break from what’s otherwise largely been a for-profit enterprise. Others are investing in their statistics and publishing them more frequently, responding to client demands for real-time information at a time when government policy, and the economy at large, are rapidly changing.

 

That’s making economists and traders more receptive to private indicators, even though government data remains the gold standard due to its breadth and depth of measuring the world’s largest economy. What’s more, President Donald Trump’s abrupt firing of the head of the Bureau of labour Statistics — the traditionally apolitical agency responsible for producing key inflation and labour market data — and the perceived partisanship of his pick to replace her has some investors wary of its data. 

 

“The more data, the better,” said Stephen Juneau, US economist at Bank of America Corp. “Private providers, including our own view of internal data, add to this basket of alternative indicators that we can look to to either confirm or corroborate the signals from the official statistics or complement them.” 

 

Economists, the Federal Reserve and other policymakers have long incorporated data from private sources such as ADP Research, Challenger, Gray & Christmas Inc. and the University of Michigan to form their view on the health of the economy, and many Wall Street banks use their own card data to track consumer spending. Bloomberg LP, the parent company of Bloomberg News, is also a provider of public, private and proprietary economic data.

 

Third-party providers garner even more attention during government shutdowns when federal data aren’t published — a relatively frequent threat in a country with such divisive politics. 

 

Now, several upstarts are trying to break into the mix more consistently.

 

Workforce analytics firm Revelio Labs, which sells job-market data to hedge funds and private equity firms, said in light of Trump’s firing of the BLS commissioner, it will provide macro-level statistics free to anyone, as such figures should be a “public good.” The firm already produces data on changes in employment, job openings and wages at the company and occupation level.

 

It will now aggregate those up to the national level by drawing from over 150 million individual job profiles on platforms like LinkedIn and Jobcase. Revelio Labs says that covers 85 per cent of all employed individuals, compared to an estimated 27 per cent from the BLS survey of businesses. 

 

“In an ideal world, we’ll put a little bit of competitive pressure on the BLS to maybe update their methods, or maybe start partnering with outside providers like ourselves for some of these metrics,” said Lisa Simon, chief economist at Revelio Labs. The first release will come next week, right before the August employment report from BLS.

 

The July jobs report stirred the latest drama at BLS, when substantial downward revisions prompted Trump to fire Erika McEntarfer and accuse her, without evidence, of manipulating the numbers to make Republicans look bad. Separate episodes of botched data releases, as well as a broader trend of declining response rates, have also raised trust issues with the agency and its data.

 

Broader uncertainty

 

At OpenBrand, which sells inflation data to users like manufacturers and retailers, Trump’s on-again, off-again tariffs are boosting demand from clients who want to know how much competitors are raising prices or implementing discounts, said Chief Economist Ralph McLaughlin. Its figures cover nearly 200,000 products, and the company launched a new product in August that tracks price changes “as they happen, not a month later.”

 

Some platforms like Motio Research are still trying to figure out how to profit from their work. The three-person startup, which produces household income insights using Census Bureau data, is looking to sell some 150 data series to financial firms and research institutions.

 

“We would still like to try to provide something for free to the public as much as we can, because I think there is a public good component here and we are trying to keep that going,” said co-founder Matías Scaglione. “And with this new series, we’ll try to monetise some of it, but then to provide open access to some of that.”

 

The idea that private-sector data can be a public good doesn’t sit right with Claudia Sahm, chief economist at New Century Advisors who formerly worked at the Fed. While the government has no profit motive behind its work, companies are ultimately in business to make money, and should they fail, they’ll just stop producing statistics, she argued in a recent Bloomberg Opinion column. 

 

“These are private companies. They have resources, they have shareholders, they have payroll they have to make,” Sahm said in an interview. “Whereas with the government, they’re not making money off this. They’re very transparent about how the statistics are made. So it’s not like a competition with some other provider.”

 

Ultimately, many private-sector providers – including Revelio Labs and OpenBrand – benchmark their numbers against government data, or use them as a starting point. Despite all the concerns around the reliability of official statistics, they’re still seen as the gold standard due to their rigor, tradition and independence.

 

“I see this as a complement to what Census and BLS are doing,” Scaglione said. “We’re trying to provide something that is leveraging public data.”