The battle over economic data: growing more intense and trying

The week ahead is very big for the economy.

Reports from the federal government are due on inflation, jobless claims, retail sales industrial production, import prices, factory utilization and business inventories.

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The reports will be read and discussed. Investors will make — or try to make — decisions based on the data. And in the backs of everyone's minds will be this question:

Is the data real?

If President Trump doesn't like the data, he (or someone else in the administration) might call it rigged.

If he likes it, his opponents will call it rigged.

The people who make decisions to build a factory or buy or sell bonds or stocks may be forced to say, “We're making this decision using data that we think might be accurate. Really.”

And some will throw up their hands up and say, “I have no idea.”

The struggles for good business data

The data quality coming from the government has been going south for years. If you have dealt with it regularly, you know the first version of a report — housing starts, say — is basically a draft because it takes so long to gather the numbers.

It will be revised a month later and a month after that. It will be revised one more time usually after the first of the year.

Revisions sometimes can be huge, like the recent jobs report that contained huge and depressing revisions to the reports the Bureau of Labor Statistics issued in May and June. Trump called the report rigged and fired BLS Commissioner Erika McEntarfer.

Data collection, however, is a tough business, as tough as forming an investment opinion on Nvidia (NVDA) or Target (TGT) , or growing rutabagas.

And we'll get another picture of it Tuesday when the Consumer Price Index for July is reported. The forecast on Wall Street is that the CPI will be 0.2% for the month and 2.8% year over year.

To come up with that data, the Bureau of Labor Statistics sends out a small army of price checkers to check the prices of everything consumers pay for: from soap to milk to sneakers to airline fares to auto insurance, to that tutu Granny buys for her granddaughter during a stop at Walmart (WMT) .

You can say, “Well, automate it. Have XYZ supermarket or ABC big-box retailer just send in their prices.” Do you trust that data?

Supermarket operators and other retailers wouldn't. They would — and do — regularly have store employees check competitors' prices.

The problem now is that there are fewer people checking prices. The BLS used to collect data from 75 cities. It has shut down price-checking operations in Buffalo, N.Y., Lincoln, Neb., and Provo, Utah, The Wall Street Journal reported Sunday.

The BLS is not collecting 15% of the data it used to gather, The Journal said. It may worse than that, Omair Sharif, founder of analysis firm Inflation Insights, told the paper. He puts the number at 20%.

That's the pickle. And someone has to define what accuracy is and, if serious about it, estimate the cost to get it.

So, yes, it's a big week for the economy, which is slowing because of tariff uncertainty, artificial intelligence and a host of other issues.

But the data we will see is built that way. It's slow and tedious, much like growing rutabagas.

Jobseekers wait in line to enter the Best Hire Chicago Career Fair in Chicago, Ill. on Aug. 7.

Bloomberg/Getty Images

A new Fed governor and more on who replaces Powell

President Trump appointed his economic advisor Stephen Miran to replace Adriana Kugler, who has resigned as a Fed governor.

Miran (along with Dan Katz, now a senior Treasury Department advisor) is best known for:

Suggesting cutting the terms of Fed governors from 14 years to eight.
Giving the President the authority to fire governors.
Having state governors choose presidents of the 12 regional banks. (A complicated process: the Federal Reserve Bank of San Francisco covers nine states.)
Making all 12 bank presidents members of the FOMC. (The New York Fed president is a permanent FOMC member.)

The changes would end Fed independence. But it would also require rewriting the Federal Reserve Act of 1936.

More Social Security:

Meanwhile, President Trump and Treasury Secretary Scott Bessent are working on a possible successor to Jerome Powell, whose term as Fed chairman ends in May.

Some 10 names are being considered, including Chief Economic Advisor Kevin Hassett, former Fed governor Kevin Warsh, and Fed Governors Michelle Bowman and Christopher Waller.

Economic calendar this week:

Tuesday

CPI and core CPI, absent food and energy. From the Department of Labor.

Business Optimism Index report. From the The National Federation of Independent Business.

Speeches from Federal Reserve bank presidents: Tom Barkin of Richmond, Austan Goolsbee from Chicago, Raphael Bostic of Atlanta.

Wednesday

Speeches from Barkin, Goolsbee and Bostic.

Thursday

Initial jobless claims and continuing claims. From the Bureau of Labor Statistics. This is watched closely for signs of labor force weakness.

Producer Price Index. From the Department of Labor. This measures prices businesses receive for goods and services. The Street estimate is up 0.2% for the index overall for the month and 2.3% year over year. The core PPI excludes food and energy, The estimate is 0.3% for the month and 2.5% over the last year.

Speech from Richmond Fed president Barkin.