People walk along Wall Street outside of the New York Stock Exchange (NYSE) on August 5, 2024, in New York City. Photo: VCG

The firing of the US Bureau of Labor Statistics (BLS)'s top official by the US administration may risk negative impacts including the politicization of economic data, according to a research note from JPMorgan Chase Bank.

JPMorgan's North America Economic Research team raised the alarm over the dismissal of BLS Commissioner Erika McEntarfer, warning that the action presents risks to the conduct of monetary policy, financial stability and the US economic outlook, according to a research note the bank sent to the Global Times on Tuesday.

In the note titled "Concerning News from the BLS," Michael Feroli, chief economist at JPMorgan, cautioned that while the potential politicization of the Federal Reserve has been much discussed over the past several months, the risks of politicizing the data collection process should not be overlooked.

US President Donald Trump announced the firing of the BLS chief on Friday, accusing McEntarfer of falsifying the jobs numbers, Reuters reported.

Sharp downward revisions to past jobs data on Friday, followed by the firing of the head of the BLS, stoked investor fears about the integrity of economic data and the Fed's ability to read the true state of the economy, according to a Reuters report.

In a report on Monday, the Wall Street Journal reported that the BLS firing "tests Wall Street's reliance on government data" and some fear a decline in the world-leading economic statistics underpinning US markets.

Banks have fielded calls from clients, anxious that they may need to rethink how they invest if inflation and employment statistics tied to US investments can't be trusted, the report said. 

Global Times