Tag Archives: economy

Private firms poised to benefit from turmoil surrounding U.S. government economic data

By Erin Caddell, Anchor Advisors LLC, in partnership with GK Strategy

Controversy surrounding the U.S. government’s aggregator of economics data has shone a spotlight on privately held firms that gather comparable information. Private economic data-collection firms are likely to enjoy policy-driven tailwinds amidst a period of questioning of the validity of government statistics and pressure on federal spending.

President Trump fired Bureau of Labor Statistics (BLS) Commissioner Erika McEnterfer in August after a monthly employment report announced downward revisions of U.S. jobs created in May and June of more than 250,000, plus a less-than-expected reading of 73,000 new jobs in July (BLS reported 5 September that 22,000 jobs had been created in August). Trump claimed the jobs numbers were “rigged” to undermine his Administration (Trump ramped up his broadsides further following a 9 September BLS report that lowered its estimates of job creation in the year ending March 2025 by more than 900,000, the largest such revision in its history).

Trump has nominated E.J. Antoni, a Trump loyalist, chief economist of the conservative Heritage Foundation and a BLS critic, to replace McEnterfer as the next Commissioner. Antoni has suggested that if confirmed he may temporarily suspend release of the monthly employment report to validate its methodology. Critics argue Antoni is unqualified since he has never worked in government, while his predecessor spent 20 years at the U.S. Census Bureau and Treasury Department prior to her appointment. Antoni’s detractors have argued further that an overtly partisan Commissioner would undermine public perception of BLS.

Private economic data-collection firms have an opportunity to benefit regardless of Antoni’s fate. If Antoni is confirmed, analysts will mine BLS’ data for signs of political bias. If rejected, the agency will face months without a confirmed leader. Regardless, any sustained run of reported job losses would surely draw further ire from Trump, ratcheting pressure on BLS further. Additionally, the next Commissioner will have to reckon with lower funding and staffing. The Trump Administration has recommended to Congress that BLS’s budget be cut by 8% in F2026, with staffing reduced to an 11-year low (shown below), though this recommendation is subject to Congressional approval. The controversy appears to have already hit BLS’ workforce, with some one-third of leadership positions at the agency reportedly vacant.

U.S. Bureau of Labor Statistics (BLS) – Congressional Appropriation and Headcount

Fiscal year Appropriation FTEs
2016 609,000 2,195
2017 609,000 2,185
2018 612,000 2,022
2019 605,000 2,057
2020 655,000 1,961
2021 655,000 1,965
2022 687,952 1,949
2023 697,952 2,023
2024 697,952 2,058
2025 703,952 2,019
2026E 647,952 1,851

Source: U.S. Department of Labor. Note: F26E represents DOL’s recommendation to Congress.

Who to Watch

Several players appear positioned to leverage the opportunity to pick up the slack amidst concerns about validity of BLS data, including LinkUp, PriceStats and Yipitdata, as well as industry veterans ADP and Manpower.

LinkUp uses data sent directly by companies as well as publicly available information to provide analysis of national and local employment trends. LinkUp was acquired in November 2024 by GlobalData, a publicly traded U.K.-based firm (London stock ticker DATA). Lightcast provides a similar service, and last year was acquired by KKR. In the inflation arena, PriceStats is a self-funded firm founded in 2011, which uses public information to generate daily inflation reports in the U.S. and 24 other countries. Similarly, Yipitdata uses automated scans of millions of websites to assess changes in consumer behavior; Yipitdata raised $475m from Carlyle in 2021. Numerator is a startup that uses online surveys to help companies assess perceptions of their products and brands with consumers. While not exact parallels to BLS, these companies could reposition their businesses to more directly capture employment data.

The best-known alternative to the BLS is a monthly report produced by payroll administrator ADP. Similarly, staffing firm Manpower Group produces a quarterly survey on U.S. staffing trends. While less comprehensive than BLS’, there is an opportunity for ADP or Manpower to expand their data sets – and charge for the service – given the turmoil at BLS.

Historically, the federal government’s dominant place as the provider of U.S. economic data has made the notion of private-sector replacements seem woefully inadequate. Yet as with many developments in Trump’s second term, wishing for a “return to normal” is just that – a wish. The credibility of government economic data will continue to be questioned, while BLS’s funding and staffing pressures persist. The private sector has a clear opportunity to step in and fill the void.

Tariff climbdown offers Trump an off ramp, but uncertainty remains

History repeats itself. An adage the US President and his team of advisers would do well to heed.

In 2022 the radical tax cutting budget announced by Liz Truss’ government sent yields on UK gilts spiralling out of control, with the 10-year gilt yield increasing by the largest amount in a single day since the 1990s. The Bank of England had to intervene with emergency bond purchases to prevent a collapse in the pension fund market.

This market crisis ultimately had profound political consequences, with Kwasi Kwarteng being removed as Chancellor after just 38 days in office, and the end of Liz Truss’s premiership following soon after, making her the shortest-serving Prime Minister in UK history at only 49 days.

The episode highlighted how sensitive financial markets can be to fiscal policy decisions, particularly when they raise concerns about a country’s debt sustainability or when policy changes are announced without adequate preparation or buy-in from the market.

We can look further back to understand the might of the bond market. President Clinton’s economic adviser, James Carville, said: “I used to think that if there was reincarnation, I wanted to come back as the President or the pope or as a .400 baseball hitter. But now I would want to come back as the bond market. You can intimidate everybody.” This has arguably proved to be the case for President Trump – despite trillions being wiped off the stock market, it was rising yields on US Treasury bonds that forced him to blink.

The President claims that the decision to pause the new reciprocal tariff regime for 90 days was the result of 75 countries contacting the White House to express willingness to negotiate trade deals. This narrative creates a potential blueprint for a further watering down of tariffs once the pause ends. Trump has created some leeway to say that after successful negotiations countries will no longer be “ripping off” the United States and will point to his tariffs as a masterstroke in political and economic diplomacy. This exit strategy, however, may come too late to repair the damage done to the international economic and geopolitical order that Trump’s approach is likely to leave in its wake.

This short reprieve, as it may still turn out to be, is creating major issues for the global economy, with financial markets in a state of flux trying to pre-empt and then respond to Trump’s next move. The political and economic uncertainty of the next three months will be difficult to navigate, particularly for multinational businesses with complex supply chains.

UK Prime Minister Sir Keir Starmer has already acknowledged that fixating on whether the UK can negotiate the removal of its own 10% tariff is almost irrelevant, given the potentially more serious impacts the UK could face in the event of a global economic slowdown. A trade war between the two biggest global economies – the United States and China – would have far reaching implications that no country would be able to insulate itself from. The Bank of England has already warned that supply chain disruptions would be expected to weigh heavy on UK economic activity.

This all creates a big headache for the Chancellor of the Exchequer, Rachel Reeves. Having had to make some politically unpopular decisions in recent week to restore the £9billion of fiscal headroom she identified in the autumn budget in October, she could once again find this headroom wiped out as UK growth is revised down. There is already speculation about HM Treasury’s potential response. Tax rises, more spending cuts, or additional borrowing are the options, and none of them are politically palatable.

The global economic challenges have already had an impact on the machinery of government. The Prime Minister has removed two key people from the Number 10 policy unit as part of efforts for the government to speed up economic growth and policy delivery. In the coming weeks it is likely the government will bring forward the publication of the government’s Industrial Strategy (originally scheduled for publication alongside the Spending Review in June) to demonstrate that the UK is open to business and ripe for international investment. The government has also shown a willingness to support industries that are exposed to tariffs.  In anticipation of tariffs coming into effect, Starmer announced a watering down of regulations relating to electric vehicle sales targets to provide manufacturers with some breathing space. We are likely to see additional measures announced as the government continues its consultation with business on the impacts of higher tariffs, and what the UK’s response should be.

The government is facing a significant challenge to its central mission to grow the economy and raise living standards. A renewed emphasis to go further and faster in the delivery of its reform agenda, does, despite the doom and gloom, offer an opportunity for businesses. Policymakers are firmly in listening mode. Businesses that can offer solutions to the economic pressures the government is facing, as well as a commitment to investing in the UK, will find a welcoming ear.

The next few months will undoubtedly be challenging and uncertain. However, a renewed collaboration between the public and private sector to navigate these turbulent times has the potential to offer a pathway for the UK to position itself as a top destination for investment and business growth.

GK Point of View - Tory and Labour Priorities in 2024

GK Point of View – Tory and Labour priorities in 2024

GK Senior Adviser Robert Blackmore and Adviser Noureen Ahmed assess the priorities for the Conservatives and Labour in 2024 as we make our way closer to a general election. 

The Tory plan to build back core support 

The Conservative Party begins 2024 in dire straits, over 20 points behind Sir Keir Starmer’s Labour in the polls, they are running out of time to avoid a chastening defeat. Party leaders are therefore concentrating their efforts on ensuring they have strong support with the Party itself, while strategists desperately try to home in on the clearest path to victory, reducing illegal immigration via the Rwanda scheme, and providing tax cuts. 

Much of the Government’s political capital is being spent on making its plan to send some asylum seekers to Rwanda for processing a reality. The updated Rwanda Bill has now reached the House of Lords, where intense opposition is expected. For party strategists, it provides the Conservatives with an opportunity to weaponise the debate and highlight the immigration and Brexit-related tropes that dominated the political debates in the late 2010s. 

However, the political salience of the small boats issue to the wider country, as opposed to the party’s rank-and-file, is not yet clear. That is why the Party is so keen to ensure voters feel economically empowered, as the next election approaches. With the Spring Budget scheduled for 6th March, there are a number of tax cuts that Chancellor Jeremy Hunt has been considering in recent weeks, including further cuts to national insurance, cuts to income tax, and an increase in the child benefit threshold. The Chancellor, however, has been managing expectations about how feasible these may be, with the likelihood that the degree of fiscal headroom in March will be lower than expected. A fourth category, cuts to inheritance tax, is also now deemed less likely, as the Prime Minister fears it could be portrayed as a tax concession to the wealthy.

Yet, such a strategy is dependent on the electorate’s support for the Government after 13 years in power. Will they show gratitude to the Government for providing extra pounds in their pocket and vote accordingly? The tax burden is the highest it has been since the Second World War, and, according to the Resolution Foundation, wage stagnation represents a real-term decline in take home pay for many households since 2008. Given these challenges, it is not guaranteed that the Conservatives’ strategy will cut through. 

It’s in the bag for Labour surely? 

As the next general election looks increasingly likely for late Autumn, the Labour Party is planning to finalise any manifesto commitments by mid-February (in the unlikely scenario that the PM announces a May election). Although the Labour Party requires a significant electoral swing to claim a majority, it has been buoyed by recent polling indicating that Labour are firm favourites to lead the next government. As a result, many in Labour HQ are optimistically planning the Party’s campaign strategy. 

In 2023, Labour Leader Sir Keir Starmer unveiled his 5 national missions that the party will build its manifesto around. Core missions include Labour’s ambition to support the NHS to get back on its feet and break down barriers to opportunities. 

Unsurprisingly, education has remained at the forefront of Labour’s core priorities, with the Party recently unveiling its plans for schools, further education, and the early years space. The Party is determined to introduce reforms to support the development of young people and better prepare them for adulthood. 

The NHS is regarded as an area of strength for the Party, with the public almost always preferring Labour’s handling of the NHS. Given the widespread awareness of ongoing crises, such as doctors’ strikes, long waiting lists and inaccessible GPs, the Party is letting the national story do the campaigning for them, with scant few serious pledges on health and social care policy. Shadow Health Secretary, Wes Streeting, has promised to work to address the fundamental issues, with promises made by the Party to boost funding investment, cut down waiting lists and improve staff recruitment. 

However, further information on reforms have not been made public – many at Labour Party HQ worry that a detailed proposal may just offer the Conservative Party a “free win”, by giving it something to critique. The manifesto will shed light on where their focus may lie on health, but it’s unlikely that Labour will reveal its plans in full before taking power. Nevertheless, Labour has now started talks with the civil service and is finalising policy. We expect Labour to accelerate its campaign plans and attempt to present itself as a calming presence in contrast to the continuing Tory storms. 

 

GK Point of View – Reflections on the Autumn Statement

On Wednesday 22nd November, Jeremy Hunt MP unveiled his Autumn Statement, setting out the Government’s tax and spending commitments for the next year.  The backdrop to this year’s Autumn Statement presents a number of challenges for a government with likely less than a year until the next General Election. The UK’s inflation rate stands at 4.6%, more than double the Bank of England’s target of 2%. Growth rates have stalled, and the Bank of England is predicting that the UK will see zero growth until 2025.

To better understand the true impact of the decisions in the Autumn Statement and how they will impact both the wider economy, and specific sectors, GK Strategy have developed a briefing containing sector specific insight and analysis from our Senior and Strategic Advisers.

Find GK’s briefing here: Autumn Statement 2023