The Consumer Price Index (CPI), a widely used inflation gauge, has become less precise due to reduced data collection in three cities and increased “imputations” by the Bureau of Labor Statistics (BLS). The BLS stopped collecting data in Lincoln, Nebraska; Buffalo, New York; and Provo, Utah, and will use educated guesses for certain items. This reduction may increase volatility in subnational or item-specific indexes.
Economists warn that sustained underfunding could degrade foundational economic data used for policymaking, market analysis, and business planning. The BLS’s need to infer more data points due to personnel and funding constraints is deeply concerning, said Gregory Daco, EY-Parthenon’s chief economist.
The Trump administration’s fiscal 2026 budget proposal includes an 8% reduction in BLS funding and staffing, further exacerbating concerns about the nation’s statistical infrastructure. While Alan Detmeister, a UBS senior economist, notes that the immediate impacts on inflation readings may be minimal, he warns of potential long-term issues with data accuracy.
Detmeister flags anomalies in imputed prices, which have surged 15% in March and 29% in April. Any further reductions in observations could create more noise in monthly CPI data, making it challenging to evaluate economic trends. The upcoming May CPI release will be scrutinized closely for any signs of impact from tariffs.
As the nation’s statistical infrastructure faces funding constraints, economists urge caution when interpreting economic data, particularly in light of ongoing trade tensions and potential data disruptions.
Source: https://edition.cnn.com/2025/06/05/economy/cpi-data-bls-reductions