THE Bureau of Labor Statistics shared more information about inflation with Wall Street “super users” than previously disclosed, emails from the agency show. The revelation is likely to prompt further scrutiny of the way the government shares economic data at a time when such information keenly interests investors.
An economist at the agency set off a firestorm in February when he sent an email to a group of data users explaining how a methodological tweak could have contributed to an unexpected jump in housing costs in the consumer price index the previous month. The email, addressed to “Super Users,” circulated rapidly around Wall Street, where every detail of inflation data can affect the bond market.
At the time, the Bureau of Labor Statistics said the email had been an isolated “mistake” and denied that it maintained a list of users who received special access to information.
But emails obtained through a Freedom of Information Act request show that the agency – or at least the economist who sent the original email, a longtime but relatively low-ranking employee – was in regular communication with data users in the finance industry, apparently including analysts at major hedge funds.
A reporter’s efforts to reach the employee, whose identity the bureau confirmed, were unsuccessful.
Emily Liddel, an associate commissioner at the Bureau of Labor Statistics, said the agency did not maintain an official list of super users and that the employee appeared to have created the list on his own.
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“It is not something that the program office assembled or maintained or sanctioned at all,” she said.
There is no evidence in the emails that the employee provided early access to coming statistical releases or directly shared other data that wasn’t available to the public. In several instances, the employee told users that he couldn’t provide information they had requested because it would require disclosing nonpublic data.
But the emails show that the employee did engage in extended, one-on-one email exchanges with data users about how the inflation figures are put together. Such details, though highly technical, can be of significant interest to forecasters, who compete to predict inflation figures to hundredths of a percentage point. Those estimates, in turn, are used by investors making bets on the huge batches of securities that are tied to inflation or interest rates. NYT
