In a dramatic move underscoring rising tensions over economic data and central bank policy, President Donald Trump has dismissed Erika McEntarfer, the head of the U.S. Bureau of Labor Statistics (BLS), just hours after the release of a weaker-than-expected July jobs report.
McEntarfer, appointed during President Joe Biden’s administration, was removed on Friday amid Trump’s accusations—offered without evidence—that she manipulated employment data to discredit his leadership and favor Democrats. Trump announced the firing publicly, stating that the BLS needs leadership that ensures data are “fair and accurate” and not used for “political purposes.”
The BLS’s latest report showed a notable slowdown in job growth over the past three months, with substantial downward revisions for May and June. Trump responded by claiming the numbers were “rigged” to harm Republicans politically.
The Labor Department confirmed McEntarfer’s termination and announced that Deputy Commissioner William Wiatrowski will serve as acting commissioner.
Fallout Reaches the Federal Reserve
Shortly after the firing, Federal Reserve Governor Adriana Kugler—another Biden appointee—resigned months before her term was set to end in January 2026. Her departure clears a path for Trump to potentially reshape the Fed, including selecting a successor for Chair Jay Powell, whose term ends in May 2026.
Trump has increasingly criticized Powell over the Fed’s interest rate policies and recently visited the central bank’s Washington headquarters to voice concerns, including the cost of its $2.5 billion renovation. On social media and in a Newsmax interview, Trump said Powell should resign and hinted he would remove him “in a heartbeat,” despite market implications.
Integrity of U.S. Economic Institutions Questioned
The firing of the BLS commissioner is unprecedented and has alarmed economists and data users. David Wilcox, former chair of the now-disbanded Federal Economic Statistics Advisory Committee, warned that this move undermines the credibility of U.S. economic statistics, potentially leading users to question whether data are being manipulated to serve political ends.
Former BLS leaders, under a group called “Friends of BLS,” echoed these concerns, noting that in countries where economic data have been politicized, public trust and institutional integrity have suffered lasting damage.
Market Reactions and Future Uncertainty
The political shake-up sent ripples through financial markets. The dollar dropped sharply—down 2.3% against the yen and 1.6% against the euro—after the jobs data and Kugler’s resignation fueled speculation that the Fed may adopt a more dovish stance. U.S. Treasury yields also fell, with two-year yields down to 3.68%.
Krishna Guha of Evercore noted that Kugler’s resignation could accelerate Trump’s selection of the next Fed chair, suggesting that the appointee might begin influencing policy even before Powell steps down.
As Trump moves to consolidate influence over key economic institutions, critics warn that the independence and reliability of U.S. financial data—and the Federal Reserve’s decision-making—may be at risk.
