BLS head fired, CPI reports will become a lie, TIPS are trash?

[ochotona]

"I only want reports issued that make me look good. Anything that bruises my snowflake ego will be suppressed."

You now really have to wonder whether TIPS capital adjustments, IRS bracket and standard deduction adjustments, and Social Security benefit adjustments are going to be made based on Junk CPI measurements.

Even if you don't own TIPS, and you're too young for SocSec, you really should care, because not adjusting IRS brackets and deductibles upward with inflation amounts to a stealth tax increase year after year.

I own a lot of STIP... a TIPS ETF with 3-5 year dated TIPS, and it has been beating it's non-TIPS cousin which is SHY, but... I'm going to have to watch it like a hawk from now on.

FYI, the STIP total return over the past year is 6.30% ! It really has been a great safe-haven.

[boglerdude]

Trust the ScienceTM

https://fred.stlouisfed.org/series/A091RC1Q027SBEA

Rates are going to zero, but who will be given loans at zero besides government. Er, Orangeman personally.

[welderwannabe]

Someone needs to shake up the BLS. The monthly job reports have been absolute garbage for 18+ months. A total waste of time to even look at them, with the revisions far exceeding the base numbers to begin with. I review them every month, and have continued to get frustrated.

As I have said in other posts, I have major trust issues with CPI as well as they are always playing with the components that make it up, and when you look at things like housing over decades, the increases have not matched CPI. One of the reasons i'm not a huge fan of TIPS, as you have to trust the government to report this stuff properly when they are financially incented not to do so.

I don't think they are making up numbers for political reasons like Trump stated, I just think it is classic government incompetence and apathy to solve any problems. If I Ied the BLS last year and had to revise down 1M jobs for the previous 12 months like they did last year, or made these huge revisions for the prior 2 months in last week's report, I might have thought to look into the problem instead of letting it continue.

[yankees60]

Two things related to this:

https://tipswatch.com/2025/08/04/treasu ... t-to-tips/
Treasury reaffirms its commitment to TIPS

https://www.bogleheads.org/wiki/Accuracy_of_the_CPI
Accuracy of the CPI

I will later make comments on the second one after others here have time to respond to it.

[welderwannabe]

Yes, I've read the boglehead forum CPI statement before. I especially like the part where they claim to have reached out to AARP, who responds and said that they believe CPI is accurate, but doesn't accurately reflect the expenses of their constituents. Which means its not accurate, at least not for those folks and counts as a lack of confidence IMHO.

Make no mistake, I don't think that the BLS is sitting there and intentionally tweaking numbers in a fraduulent way, for either CPI or The Jobs report. However, and I can't find the interview anymore whick makes me angry, but I heard an interview with an ex BLS employee who stated that they did their best to be accurate, but if a judgement call had to be made on the way a stat is looked at, or for seasonal adjustments, that no one ever got yelled at if the number came out looking more favorable, and they had to revise it down later. The media tends to just pay attention to the current month, and not the revisions. So its safer to err on the side of the number looking better, which in the case of jobs means showing more jobs, or in the case of CPI showing less of an increase. They can always revise downward later when they get a better picture and no one pays attention to that.

If it was just normal statistical sampling errors, and not an internal bias for whatever reason, you'd expect the upward and downward revisions to be equal, around 50/50 over time, but NOPE. The bias is always to report a higher number and revise down later. I spend a bunch of time on this, and again pay attention to the reports every single month.

In 2025 year to date, the revisions have been 65% to the down.
2024 was 63% to the down
2023 was 70% to the down.

Please note that this is on top of the giant annual corrections they make looking rearwad. For example, late last year in August they issued a statement saying that 818,000 previously reported jobs through March of 2024 were never there and were over reported. If you factor that in, the above percentages would look even worse.

The 'mistakes' always seem to bend in one direction. I haven't spent time on CPI, but I suspect a similar bias.

[Kevin K.]

I've been thinking about this a lot myself. It goes way beyond firing the head of the BLS, or the age-old question of whether and how much CPI data is manipulated. We currently have a government that is not just willing but eager to expunge any reference to facts that don't suit its agenda (e.g. the recent decision to fix the pesky problem of climate change by having the EPAS deny its existence).

Laurence Kotlikoff has an excellent post on this:

https://larrykotlikoff.substack.com/p/f ... er-is-more

And here's an even more unsettling one from a guy who knows this stuff from the inside:

https://www.slowboring.com/p/trump-threat-economic-data

What are the implications? For a retiree like myself I'm already dependent to a significant degree on Social Security, which is of course inflation-adjusted. I can doubt the CPI-W index used for COLA increases all I want but I have to accept what I'm given. But what I don't want to do - at least not anymore - is put more eggs in that basket by using a TIPS ladder as (effectively) an inflation-adjusted annuity. Instead I want to diversify away from things that depend on the full faith and credit of the U.S. government, the reliability of its data AND the U.S. dollar continuing to be regarded as the world's reserve currency.

In practical terms this means holding equities at or close to global market cap (~65% U.S., 35% international), giving serious thought to including some small caps, having at least a slice (5-10%) of gold and perhaps adding some dollar-hedged international bonds to nominal Treasuries.

Would be curious to hear others' thoughts.