When breakthroughs occur, researchers get the lion’s share of the credit. But they owe a big debt of gratitude to those who collect and organize the data with which insight is manufactured.
Economists are more dependent than most on the statisticians that produce the measures we rely upon. Data in the natural sciences goes back centuries, and remains as relevant today as it was in the times of Newton and Galileo. The collection of data in the social sciences is relatively young, and it cannot be assembled neatly in a laboratory.
Investing in economic data pays for itself, many times over.
Economic metrics have traditionally been provided by official institutions. In the United States, we are fortunate to have agencies who take their craft very seriously. The Census Bureau, the Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS) produce information that is trusted by investors worldwide. The work that they do rates highly for quality, and its integrity helps to support the value of American assets. It is among the reasons why the U.S. has the deepest capital markets in the world.
Sustaining the collection of critical economic information has become more challenging in recent years. Funding for the statistical agencies has been reduced, and response rates to key surveys have been declining. The infrastructure used to house and deliver data is in need of upgrade. Last year, a report from American Statistical Association suggested that the system was at risk.
In recent weeks, those concerns have been compounded by reductions in the government workforce and the elimination of government-provided databases containing health and atmospheric data. The Secretary of Commerce has proposed revising the definition of Gross Domestic Product, which is long-standing and internationally accepted.
Consistent, timely economic measurements are critical to making good policy. They will demonstrate successes and signal when it is time to make changes. A loss of these statistics, or a loss of confidence in them, would be a loss to markets and to society.
To be sure, economic statistics are prone to a degree of imprecision that physicists would find intolerable. In light of this, the production of that data must be objective, independent, and adequately financed. When those reviewing government agencies arrive on the doorsteps of the BEA and the BLS, I hope they will walk by briskly.
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