Why the global macro data crisis is everyone’s problem

The global macro data crisis is undermining policymaking, financial markets, and public trust, driven by declining data quality and reliability. We take a closer look at the root causes of this crisis, its far-reaching consequences, and the urgent need for reform in public statistical systems worldwide.

Accurate public data is the bedrock of sound policymaking—and a core government responsibility.

But the quality of macro statistics has deteriorated sharply in recent years. Lower response rates combined with pandemic and policy shocks (lockdowns, fiscal stimulus, and migration) have rendered traditional approaches to data collection, integration, and interpretation less useful.

Now, amid unprecedented revisions, the unreliability of public data has reached a crisis point. And that should concern us all—from policymakers and investors to ordinary citizens.

Declining response rates lead to unreliable data

A good portion of macroeconomic data is collected via surveys rather than in-field or automatic recording. Hence, when survey response rates decline, as they have for the Bureau of Labor Statistics (BLS) (Figure 1), the output series becomes less robust. That’s because statisticians use extrapolation and other assumptions to fill in the gaps.

This reality came into stark view in the US recently following a major downward revision to employment data and the subsequent firing of the Bureau of Labor Statistics commissioner.

Data challenges are widespread

But these data problems are not confined to the BLS. The US Census Bureau has also had considerable difficulties with population estimates and retail sales data. For example, retail sales at department stores were initially reported to have surged 17.5% month-over-month (seasonally adjusted, not annualized) in January 2023—a figure that was later completely revised away (Figure 2).

Data quality is a global issue

The UK Office of National Statistics is in the process of incorporating various methodological reforms following vocal criticism, including from Bank of England Chief Economist Huw Pill, regarding the quality and reliability of its data.¹

An independent review by Professor Denise Lievesley highlighted some of the challenges and laid out suggestions for improvement. This review underscored that, “statistics we can trust are essential for a healthy society as they help to ensure well-informed decisions” and that “official statistics […] also serve to empower, enabling citizens to call governments to account and providing a window on society. As such they are an indispensable part of a democratic society."²

Improving public data is a shared responsibility

Whether through technology upgrades, questionnaire streamlining, or mandating survey responses, ideas being considered elsewhere are also relevant to improving public data collection in the US. This is an effort worth funding, regardless of party affiliation. And it’s important for the revamp to engage the public and data users in a proactive way.

Accurate, publicly available data is also critical for fair and efficient markets. A lack of access to trustworthy macro data can create a broader, systemic information imbalance.

There is a reason trading on confidential, material, non-public information is not allowed. Typically, such concerns center on company-specific information, but an environment where official statistics become less available can fuel another, more pervasive, kind of information disparity, as not all market participants can access private, alternative data sources.

In my role as chief economist at State Street Investment Management, I am often asked about the most important tool in my day-to-day work. My answer has not changed since my first day on the job as a junior economist many years ago: data.

Good data is the critical, non-substitutable ingredient to trustworthy analysis.

Private data valuable, but not a substitute

Numerous private-sector data sets have long supported the interpretation of economic activity. Two well-known US sources—Indeed job postings and PriceStats—demonstrate how private data can offer valuable insights (Figures 3 and 4). But while these private data sources can enhance or help validate public statistics, they are not substitutes for public data.

Among the most common benefits of private data are:

• Timely updates with higher frequency
• Granular insights into specific industries
• Less reliance on surveys, often reflecting real-time activity

But private data series also have limitations:

• Narrow scope, often tied to a firm’s geographic footprint
• High cost of access
• Risk of discontinuity, as private providers can change methodology or stop publishing without notice

Alternative, private-sector data sets can be extremely useful, but they can only complement and never fully replace robust public statistics.

Time for an independent data review

Although macro data quality has only recently become headline news, the underlying problems have been building for years. An independent review—similar to the UK’s—would be helpful, ideally with the engagement of data users and Congressional oversight.

Reliable, unbiased public statistics are critical to good policymaking, here in the US and everywhere. Transparent and reliable US macro data has long been a positive differentiating feature of the US economy, helping to attract foreign capital. We must ensure it stays that way.