Report blames US Labor Department's statistical leadership for data missteps

By Lucia Mutikani

WASHINGTON (Reuters) - The U.S. Bureau of Labor Statistics' leadership was to blame for a series of missteps this year that put the agency under scrutiny, a report said on Tuesday, noting that its shortcomings included being insufficiently focused on economic data releases, communication with users and providing adequate training.

But the report from a team of experts made up of government and private sector members said none of the incidents were related to the quality or accuracy of the agency's core data work.

No dishonest or nefarious underlying motives had been found, the report added. Acting Labor Secretary Julie Su ordered an inquiry after three incidents, including the early release of a portion of the Consumer Price Index for April.

"I want to emphasize that throughout their conversations with me, the team emphasized that overall, their investigation revealed a really excellent organization with a highly capable staff, deeply committed to their mission and their agency," BLS Commissioner Erika McEntarfer told reporters.

"My first hope and expectation is that you will see a seamless data release process. We've already taken a number of steps to further mitigate risk."

The BLS compiles economic reports such as the closely followed monthly employment report and consumer price data.

In May, the BLS reported that a subset of files had been inadvertently loaded to its website approximately 30 minutes prior to the scheduled 8:30 a.m. ET release for April's CPI and Real Earnings data. McEntarfer said there was no noticeable movement in the U.S. Treasury market on the day some of the CPI data was released early.

Months earlier, a BLS economist was reported to have been sharing undisclosed technical calculations underlying some of the data from the CPI series with private-sector economists who were dubbed super-users.

"It was an idiosyncratically collected group of emails of people who had been asking him questions that he put together against policies and procedures that BLS outlined, so, yeah, it was limited to one person and ceased at the moment its attention was brought to the agency," McEntarfer said.

In August, the release of the preliminary annual benchmark revision for the nonfarm payrolls report was delayed for more than 30 minutes after its scheduled 10 a.m. release time, but it still found its way onto social media platforms before the agency posted it.

The investigation found that the agency's technology and software modernization had been hampered by underfunding and a lack of multi-year funding to enable it to ensure its processes and systems kept pace with technological advancements.

USE OF CONTRACTORS

The panel of investigators recommended among other things that the BLS re-imagine enterprise training for front-line staff, communicate earlier and more frequently with users about upcoming revisions to survey methodologies in a manner that is appropriate for both expert and more general users, and revise contingency planning to mitigate the risk of untimely releases.

"BLS management mandated accountability at the supervisory and manager levels, and added standards for those two levels in performance management plans," said Jonathan Schwabish, a member of the committee that conducted the inquiry into the BLS' procedures and practices.

Schwabish, who is a senior fellow at the Urban Institute, also said the BLS had removed contractors from critical roles and limited those functions to federal staff.

"So prior to these incidents, certain releases either had input or help from federal contractors, and so BLS, after these incidents, removed the contractors from those roles."

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)