{"id":44466,"date":"2025-08-22T10:45:03","date_gmt":"2025-08-22T10:45:03","guid":{"rendered":"https:\/\/isafespend.com\/?p=44466"},"modified":"2025-08-22T10:45:04","modified_gmt":"2025-08-22T10:45:04","slug":"will-trump-now-rig-the-cpi","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=44466","title":{"rendered":"Will Trump Now Rig The CPI?"},"content":{"rendered":"
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This morning, the Bureau of Labor Statistics (BLS) released the July inflation numbers, which were higher, as economists expected. Normally, a higher inflation rate would spark somewhat boring debates about Fed policy and consumer sentiment. This time, new danger lurks: manipulating numbers.<\/p>\n

The new risk is that the numbers themselves \u2013 how they are calculated, reported, and trusted \u2013 are a political weapon. Trump fired the neutral Bureau of Labor Statistics last week because he didn\u2019t like the jobs numbers and yesterday appointed a loyal data soldier. Trump\u2019s new Commissioner is a political and partisan economist \u2013 E.J. Antoni from The Heritage Foundation \u2013 the think tank that wrote Project 2025. Antoni is expected to report what Trump wants. Here is what President Trump said when he nominated Antoni:<\/p>\n

\u201cOur Economy is booming, and E.J. will ensure that the numbers released are HONEST and ACCURATE,\u201d<\/p>\n

The CPI Needs To Be Trusted Not Manipulated<\/h2>\n

The Consumer Price Index (CPI) isn\u2019t just an economic report; it\u2019s the foundation for vast swaths of American economic life. It determines the Social Security cost-of-living adjustment for about 66 million Americans \u2013 57.4 million seniors, 11.2 million disabled adults, and 4.2 million children. It sets the value of Treasury Inflation-Protected Securities (TIPS) and Series I savings bonds. It governs annual increases for federal and military pensions, veterans\u2019 benefits, and Supplemental Security Income.<\/p>\n

But it doesn\u2019t stop there. CPI feeds into the calculation of federal tax brackets and penalties, state minimum wages, HUD housing subsidies, rent caps in states like California and Oregon, and collective-bargaining agreements across the private sector. It influences the postal rate you pay, the child support some parents receive, and the rent escalator clauses in commercial and residential leases.<\/p>\n

The sheer breadth is dizzying: if trust in CPI numbers erodes, so does trust in trillions of dollars in contracts, benefits, and prices.<\/p>\n

The Precedent for Politicizing And Manipulating Numbers<\/h2>\n

Trust in the integrity of American numbers was severely eroded last week. Former BLS commissioners, one Republican and one Democrat, warned that firing the economist overseeing the statistical agency jeopardizes the integrity of America\u2019s statistical agencies. If political leaders can dismiss the heads of data-producing agencies for releasing unfavorable figures, it creates intense pressure to manipulate the numbers in the future.<\/p>\n

Former BLS chief, Erica Groshen said if the numbers are rigged, why release the numbers at all.<\/p>\n

“Statistical agencies live and die by trust. If the numbers aren’t trustworthy, people won’t use them to make important decisions, and then you might as well not publish them.”<\/em><\/p>\n

Since inflation ticked up this morning the CPI could become the next target, the ripple effects could be catastrophic. Investors might begin questioning the reliability of official data. Markets could discount U.S. statistics altogether, pushing up borrowing costs for government and business alike. Ordinary Americans could lose faith that the benefits they depend on are being calculated honestly.<\/p>\n

Why Manipulating Numbers Is So Dangerous<\/h2>\n

Inflation reports already move markets. A hotter-than-expected number can shave billions off equity valuations in seconds. But add political attacks on the integrity of those numbers, and you have a crisis of confidence. It\u2019s one thing to debate economic policy in response to data. It\u2019s another to undermine belief in the data itself.<\/p>\n

Tariff-driven inflation is hard enough to manage \u2013 it makes goods more expensive while weakening growth, creating a stagflationary impulse. Trump\u2019s tariffs are largely to blame. Tariffs also don\u2019t affect everyone equally, contributing to higher inflation as retailers pass the added costs on to consumers. Tariffs act like a regressive sales tax \u2013 disproportionately hitting lower- and middle-income households \u2013 and they function as a supply shock, raising prices while slowing growth. That\u2019s the worst combination for any economy.<\/p>\n

But combine that with political instability over the accuracy of the numbers, and you inject uncertainty into every corner of the economy.<\/p>\n

For example, if CPI is seen as inflated for political gain, Social Security beneficiaries may feel their COLA is being manipulated. If it\u2019s seen as deflated, bondholders may believe their TIPS payments are being shortchanged. Either way, the perception of manipulation is enough to damage confidence and destabilize markets.<\/p>\n

CPI\u2019s Extraordinary Reach<\/h3>\n

The CPI\u2019s reach is extraordinary, as is the reliance on trusting its accuracy. Policymakers could make serious mistakes if the CPI were manipulated. Consider just a few examples of who is hurt when inflation is undercounted:<\/p>\n