The Labor Department's internal watchdog on Wednesday announced an audit into the challenges faced by the Bureau of Labor Statistics (BLS) in collecting data for its inflation and labor market reports.

The Labor Department's Office of Inspector General wrote to BLS acting Commissioner William Wiatrowski to inform the agency that the IG's office is "initiating a review of the challenges that Bureau of Labor Statistics encounters collecting and reporting closely watched economic data."

In the letter, the IG noted that the BLS announced reduced data collection activities for the consumer price index (CPI) and producer price index (PPI). It added that the BLS "recently issued a large downward revision of its estimate of new jobs in the monthly Employment Situation Report."

President Donald Trump fired BLS Commissioner Erika McEntarfer after the July jobs report was weaker than expected and revised employment in May and June downward by 258,000 jobs. Trump claimed the report was "rigged" and accused McEntarfer of political bias.

The BLS routinely revises jobs data for the prior two months with each monthly jobs report it publishes as more of its sample comes in. Response rates to the initial survey have declined over the years, which can create volatility when revisions are made based on more complete data.

BLS announced earlier this year that it had scaled back its data collection for inflation reports due to resource shortages. 

It also faces the prospect of further budget and staffing cuts – the Trump administration's fiscal year 2026 budget request for the Labor Department would cut the BLS budget for jobs reports and inflation data by about 8% each, while also cutting the agency's workforce by a similar amount.

In July, the BLS announced that in order to "align survey workload with resource levels, BLS suspended data collection for portions of the Consumer Price Index (CPI) sample in select areas across the country," which began this spring.

BLS said that it suspended CPI data collection entirely in Buffalo, N.Y., Lincoln, Neb., and Provo, Utah, while suspending about 15% of the sample in the other 72 areas around the country. The agency said it did a statistical analysis of the impact of the suspension by running a simulation dating back to 2018, which found that it changed CPI estimates by less than 1/100th of a percentage point. 

It added that it will "continue to evaluate survey operations and efficiently assign available resources to data collection in a manner that minimizes overall CPI measurement error."

The Trump administration has also criticized the BLS for the size of its annual benchmark revision to its labor force data. The BLS' preliminary benchmark revision reduced employment from April 2024 to March 2025 downward by 911,000 jobs and the agency will include the final estimate starting with the January 2026 jobs report released next February.

BLS goes through the annual benchmarking process to incorporate quarterly state unemployment data as well as more accurate records about business births and deaths into its estimates – a process which helps mitigate the reporting and non-response errors that accumulate through its monthly data collection.

Following the release of the preliminary benchmark revision, Labor Secretary Lori Chavez-DeRemer said the "massive downward revision gives the American people even more reason to doubt the integrity of the data being published by BLS."

"Leaders at the bureau failed to improve their practices during the Biden administration, utilizing outdated methods that rendered a once reliable system completely ineffective and calling into question the motivation behind their inaction. The Trump Administration is putting a stop to years of neglect," Chavez-DeRemer said.

Chavez-DeRemer has previously shared BLS statistics posted on the official Labor Department X account to tout progress in the Trump administration's economic agenda on her government X account, including a post related to the July jobs report before Trump fired the BLS chief.