Staffing shortages have forced the U.S. federal government to scale back the price checks it uses to calculate the inflation rate.
The agency suspended data gathering altogether in Lincoln, Neb., and Provo, Utah in April and halted it in Buffalo, N.Y., this month.
Government making educated guesses on prices of more goods The cutbacks come as economists are on the lookout for signs that Trump’s tariffs could rekindle inflation.
For the April inflation report, which was published last month, the government was forced to make educated guesses about more prices than usual, using the price of similar items, said Omair Sharif who tracks the data for Inflation Insights.
“The federal government hiring freeze and the drive to cut funding across federal agencies may be starting to impact the quality of economic data,” Sharif wrote in an email.
Lack of employees has compelled the U. S. . The federal government should reduce the number of price checks it employs to determine the rate of inflation. That may result in less accurate cost-of-living reports, according to economists.
In order to calculate the consumer price index, or CPI, which is a measure of inflation, hundreds of government workers examine the prices of goods and services in cities across the nation each month.
The Labor Department announced this week that it had reduced price checks across the country and suspended them completely in some cities due to a shortage of workers.
In Lincoln, Nebraska, the organization completely halted data collection. stopped it in Buffalo, North Carolina, and Provo, Utah in April. Y. during this month.
hiring freeze by the federal government.
It “makes reductions when current resources can no longer support the collection effort,” according to a statement from the Bureau of Labor Statistics. “,”.
Since President Trump assumed office, the federal government has been prohibited from hiring new employees. The Labor Department’s own count indicates that 26,000 federal employees have been let go since January, though it’s not entirely clear how big the cuts actually are.
Although the department stated that it anticipates the decreased data collection to have “minimal impact” on the overall inflation rate, it cautioned that it may increase volatility in regional cost-of-living reports or price data for specific items.
The government is estimating the costs of additional goods.
The cuts coincide with economists watching for indications that Trump’s tariffs may spark inflation again.
Ernie Tedeschi, a Yale Budget Lab economist, posted on social media, “This is the worst possible time to make staffing cuts to the CPI of all data sources,”.
“Remember that a decrease in staffing does not always translate into a lower CPI; an excessively high CPI could also be the mistake, which is also undesirable. In his letter, Tedeschi, a member of the Biden administration’s Council of Economic Advisers, stated, “We want accuracy as we try to navigate the uncertainty.”.
The government had to make more educated guesses about prices than usual for the April inflation report, which was released last month, based on the cost of comparable goods, according to Omair Sharif, who monitors the data for Inflation Insights.
In an email, Sharif stated, “The federal government’s hiring freeze and the push to reduce funding across federal agencies may be starting to impact the quality of economic data.”.
There are numerous other ways that inflation figures affect Americans. As the Federal Reserve sets interest rates, which impact the cost of borrowing for families and businesses, it keeps a careful eye on them. Additionally, they are employed to adjust government programs like Social Security for cost of living changes.
Sharif wrote, “Simply put, they have an impact on the lives of regular people.”. “Future economic results are only made worse by lowering the quality of these statistics. “.”.
