Cooking the Books
Author: Greg Valliere
August 4, 2025
MANY YEARS AGO, we travelled throughout the country with the great Lyle Gramley, the former Fed Governor, who briefed clients on the economy. Occasionally, Lyle got this tough question: could the government manipulate economic statistics?
LYLE WOULD GET TESTY: The economic statistics, he asserted, could not be manipulated — and if anyone tried, there would be an uproar on Capitol Hill and in the media.
BUT TIMES HAVE CHANGED: We’re in an era of redistricting in Texas, tariffs of 39 percent on Switzerland, friction with Canada, starvation in Gaza and a convicted pedophile getting transferred to a soft prison after she met with a Justice Department official who took no notes.
AMID ALL THE DEPRESSING NEWS in recent days is the likelihood that the labor market is softening, fast. A new Fed Chairman is coming and we worry that the weakening economy will become politicized, as Donald Trump goes through economic advisers just as he went through generals in his first term.
JUST AS LYLE GRAMLEY ASSERTED 20 years ago that the government could not manipulate the economic statistics, a new mentor passed on an important mantra to us. Our late colleague Kevin McCreadie always preached that the cheapest form of economic stimulus is confidence.
BUT HOW CAN THE MARKETS BE CONFIDENT if there’s a suspiciously strong economic report from the Bureau of Labor Statics? How will Trump react if his new BLS chief — or his new Fed Chairman — claims that weak data is inaccurate? Confidence will be in short supply as virtually all economic statistics become politicized — and suspect.
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