Following Trump's questioning of Bureau of Labor Statistics (BLS) data and dismissal of its director, Wall Street investors are considering reducing their reliance on government economic data and increasingly turning to private sector surveys.

Trump previously claimed that the BLS "manipulated" the July employment report and dismissed the agency's director Erika McEntarfer. Despite the White House providing no evidence to support this allegation, investors are concerned that government statistical data could become politicized, thereby affecting its independence and credibility.

On August 23, it was reported that facing this uncertainty, Wall Street is shifting more attention to private data sources such as Automatic Data Processing Inc Research's employment reports, Challenger, Gray & Christmas Inc.'s layoff data, and the Institute for Supply Management's inflation reports.

Analysts point out that investors are not questioning the accuracy of BLS data, but rather worry that the Trump administration might exert political influence on an agency long regarded as the gold standard for independent economic statistics. Multiple Wall Street strategists indicate that if government data becomes politicized, it will reduce market confidence and potentially increase risk premiums.

**Wall Street Strategists Turn to Private Data Sources**

Several senior investment strategists have explicitly stated they will increase their reliance on private data.

Philip Petursson, Chief Investment Strategist at IG Wealth Management, said Trump's upheaval at the BLS "raises questions about the validity of future data." He worries that the government might begin politicizing these numbers, making official data unreliable under such circumstances.

Michael O'Rourke, Chief Market Strategist at Jonestrading Institutional Services, described the situation's "optics as very poor" and plans to place greater emphasis on private data sources moving forward, particularly Automatic Data Processing Inc Research's employment reports.

Wall Street has long used recruitment statistics collected by private companies such as Challenger, Gray & Christmas Inc. or Automatic Data Processing Inc Research as supplementary information sources, but now increasing numbers indicate these reports will become more important.

The Institute for Supply Management's inflation reports or manufacturing and services data compiled by S&P Global will also receive more attention.

Brian Jacobsen, Chief Economist at Annex Wealth Management LLC, stated that "private data serves as a check on official data." He will closely monitor Senate confirmation hearings to understand whether Trump's nominees intend to change how BLS data is compiled.

Julian Emanuel, Chief Equity and Quantitative Strategist at Evercore ISI, indicated that as "government data increasingly becomes a question mark," the shift toward private data is "gaining more and more attention."

**Data Politicization Threatens Market Confidence**

Investors generally believe that private data sources can help them quickly identify problems once data becomes politicized. Wall Street strategists say they will more rigorously cross-check official data against private sources for verification.

Jacobsen from Annex Wealth Management LLC stated that if data becomes politicized, "we would notice fairly quickly" because private data sources allow economists and strategists to cross-verify.

Donald Ellenberger, Senior Portfolio Manager at Federated Hermes, warned that if the Trump administration is perceived as interfering with reporting procedures or questioning their accuracy, "the usefulness of government reports will diminish." He emphasized: "Trust is the cornerstone of the financial industry, and once lost, it's very difficult to rebuild."

Keith Lerner, Co-Chief Investment Officer at Truist Advisory Services, warned that declining confidence in data could marginally increase risk premiums, meaning slightly lower valuations and increased data volatility.

Despite these concerns, Wall Street has not completely abandoned BLS data. The August nonfarm payrolls report scheduled for release on September 5 will still be a major market event. However, as investors sense that Trump might want federal data to support his political viewpoints, they are preparing to reduce reliance on government data when necessary.

It's worth noting that BLS data itself is not perfect. Funding issues have led to staffing shortages and outdated data collection methods. Resource constraints have forced the agency to cut costs in some cases and rely more heavily on estimates, reducing data reliability. Survey response rates have continued declining for years, and data revision magnitudes have also expanded.