Billionaire investor Ray Dalio is urging a complete overhaul of how the US government calculates its economic data. His comments follow the controversial firing of the Bureau of Labor Statistics (BLS) head, Erika McEntarfer, and a massive downward revision of recent job growth figures.
Job Numbers Revised Down Sharply
The BLS initially reported 147,000 new jobs in June, but later revised that number down to a mere 14,000 – a 90% drop. May’s numbers were also significantly revised downward, from 144,000 to 19,000. This means the combined two-month revision shows 258,000 fewer jobs than initially reported. Some analysts interpreted this as a potential sign of a slowing economy, even hinting at a possible recession.
Dalio’s Take on the Firing and Data Issues
Dalio, founder of Bridgewater Associates, publicly stated that he would have fired McEntarfer as well. He believes the BLS’s methods for estimating economic data are outdated and unreliable, leading to significant inaccuracies. He pointed out that the downward revisions brought the official numbers closer to more accurate private sector estimates. Dalio emphasized his extensive experience using economic data to make investment decisions.
He expressed concern that President Trump’s firing of McEntarfer might have been politically motivated, calling it a “big problem” if true. He urged the President to clarify his reasoning. Regardless of the reasons behind the firing, Dalio stressed the urgent need for major improvements in the government’s economic data collection and estimation processes to ensure greater accuracy.