The Economic Value of Trust in Official Statistics

This National Bureau of Economic Research working paper analyzes the economic consequences of eroding public trust in official government data. The study focuses on a specific event on August 1, 2025, when President Trump dismissed the head of the U.S. Bureau of Labor Statistics (BLS) and alleged that the agency's data were rigged. Following this action, measures of economic policy uncertainty increased significantly, reflecting heightened anxiety among investors, businesses, and households. Using an event-study design, the authors estimate the impact of this firing on policy uncertainty and translate these findings into implied macroeconomic outcomes. The analysis provides a quantitative assessment of the marginal value of maintaining public confidence in statistical integrity. The baseline estimate suggests that preserving trust in the quality and independence of official statistics yields substantial economic benefits, generating approximately $25 in value for every $1 spent on the agency’s budget. This research underscores the critical role of reliable data in stabilizing economic expectations and minimizing unnecessary market volatility.