WASHINGTON (Reuters) – The Trump administration has dismantled two expert committees that collaborated with the government to generate economic statistics, potentially impacting the accuracy of data. The terminations by Commerce Secretary Howard Lutnick took effect on February 28 and were communicated via email on Tuesday to one of the panels, the Federal Economic Statistics Advisory Committee (FESAC), which aided in analyzing inflation, employment, and gross domestic product (GDP) data. In the email, it was stated in part that “the Secretary of Commerce has concluded that the objectives for which FESAC was established have been achieved and thus, the committee has been dissolved, effective February 28, 2025.” The second committee, the Bureau of Economic Analysis Advisory Committee, which provided insights on a different set of economic data, was also disbanded.
“This move will have repercussions on data quality as continuous improvement and innovation are fundamental principles of federal statistical agencies,” remarked Erica Groshen, a former FESAC member, to Reuters. “Without a robust exchange of information and advice with external experts, it will become more challenging for these agencies to enhance their data.” The Commerce Department and the White House did not immediately respond to a request for comments on Tuesday evening.
Groshen, who also served as a former Bureau of Labor Statistics (BLS) commissioner, highlighted that FESAC consisted of academics, economists from the private sector, and data scientists, focusing on enhancing economic data from the BLS and the Commerce Department’s statistical agencies, namely the Census Bureau and Bureau of Economic Analysis. These committees had been operational for at least two decades.
The dissolution of these panels follows soon after Lutnick announced his intention to remove government spending from the GDP report, a decision that some economists deemed unfeasible and aimed at concealing the economic repercussions of significant spending reductions and widespread job losses being pursued by tech mogul Elon Musk’s Department of Government Efficiency, or DOGE. “Once you venture into that territory, it becomes akin to unscrambling scrambled eggs,” commented Brian Bethune, an Economics professor at Boston College. “For instance, a substantial portion of defense spending goes to private contractors. So, how can you exclude that from GDP? It’s an absurd notion.”
(Reporting by Lucia Mutikani in Washington and Ismail Shakil in Ottawa. Editing by Gerry Doyle)
