As it was revealed that an employee of the U.S. Bureau of Labor Statistics shared internal information related to inflation data with a small number of outsiders, controversy over the existence of ‘super users’ has erupted on Wall Street.
According to a report by the New York Times (NYT) on the 19th (local time), an economist responsible for consumer prices at the Bureau of Labor Statistics at the end of last month emailed a small group of experts previously unknown detailed information about the government’s method of calculating the inflation index.
The economist reportedly wrote in the email, “There has been a technical change in the government’s method of calculating the housing cost index,” and “I have found the answer to those of you who have been looking for the cause of the (inflation data) change.”
This pertained to the previously released January U.S. Consumer Price Index (CPI), where the January CPI (3.1%) showed a higher increase than the market expectation (2.9%), prompting Wall Street experts to inquire with the Bureau of Labor Statistics about the background. The unexpected rise in housing costs was cited as the cause at the time.
Due to the strong impact of the content, the email, which was initially sent only to a limited small group, quickly spread throughout Wall Street. The Department of Labor, upon recognizing the issue, requested that the email be ignored and attempted to manage the situation, but it was insufficient.
On Wall Street, suspicions were immediately raised that “the government might be secretly sharing sensitive statistical information only with registered ‘super users.’” The Department of Labor confirmed to the NYT that the email was indeed sent to about 50 limited recipients. However, it denied the super user allegations.
The Department of Labor explained that the previously distributed email was a mistake caused by a lower-ranking employee responding arbitrarily to repeated inquiries. However, in a situation where the market is highly volatile over subtle changes in inflation indicators, Wall Street’s distrust of the government’s statistical management has increased.
Maureen Harber, CEO of economic data provider Harber Analytics, evaluated, “In a situation where everyone is reacting sensitively to the Federal Reserve’s (Fed) moves, this incident has put the Bureau of Labor Statistics in a very difficult position.”
Emily Riddle, Deputy Commissioner of the Bureau of Labor Statistics, said, “We allow BLS employees to communicate directly with stakeholder groups,” but added, “We will strengthen employee training and review information disclosure policies to prevent such embarrassing incidents from recurring.”
Meanwhile, after this incident, the Department of Labor held a separate briefing and acknowledged that there had been some changes in the method of calculating housing costs. However, it stated that the overall impact on inflation was minimal. The NYT reported that in the subsequently released February consumer price data, housing costs returned to normal levels.
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