When it comes to making crucial decisions about interest rates, jobless benefits, or investments, government and financial institutions heavily rely on data provided by federal agencies. However, a new study suggests that the integrity of this data is facing increasing risks.
Released by the American Statistical Association, the report warns that factors like shrinking budgets, declining survey response rates, and the potential for political interference are threatening the reliability of government statistics. If not addressed, these challenges could lead to a decline in the quality of data in the near future.
The authors of the report compare the statistical system to essential physical infrastructure that often goes unnoticed until something goes wrong. Nancy Potok, the former chief statistician of the United States and one of the report’s authors, emphasizes the importance of countering this downward trend before it becomes a reality.
The study, titled “The Nation’s Data at Risk,” specifically highlights the risks posed to economic data, which are critical for policy decisions and investments. With response rates to government surveys declining and budgets not keeping pace, federal agencies like the Bureau of Labor Statistics are facing challenges in maintaining the quality of data.
Experts like Erica Groshen, a former BLS leader, warn of a “slow-moving train wreck” in the data collection process. Without adequate resources, agencies may struggle to publish reliable data on various economic indicators in the future.
To address these challenges, statistical agencies are exploring incorporating more private sources and administrative records in their data collection processes. While this approach shows promise, it requires significant resources and expertise to merge different data sources and ensure the reliability of the information.
However, funding for such innovations has been scarce, with budgets for statistical agencies shrinking over the years. Experts urge Congress to allocate more funding to ensure the reliability of existing data and expand coverage in areas like gig work that are currently underrepresented.
In addition to financial support, the report calls for measures to enhance data sharing between agencies, protect statistical agencies from political interference, and uphold their independence. The lack of statutory provisions for agency autonomy was highlighted during the Trump administration, emphasizing the need for legislative action to safeguard the integrity of federal statistics.
As the importance of accurate and timely data continues to grow, ensuring the reliability and independence of government statistics is crucial for informed decision-making and economic stability.
