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Declining Response rates Challenge Economic Data Accuracy – A meaningful decrease in participation in key U.S. government surveys is prompting concerns about teh reliability of economic indicators,though recent analysis suggests the impact may be less severe than initially feared.
Historically, surveys conducted by agencies like the U.S. Census Bureau and the Bureau of Labor Statistics have formed the bedrock of economic analysis, informing decisions on monetary policy, government spending, and business investment. Though, response rates have been steadily falling for decades, with a especially sharp drop observed as the onset of the COVID-19 pandemic in March 2020. The Current Population Survey,a vital source of labor market data,has seen participation rates plummet from around 95% in the 1960s to approximately 72% in 2023,according to Census Bureau data. Similar declines have been noted in the American Community Survey and the business surveys.
This trend is attributed to a confluence of factors, including increasing public distrust in institutions, survey fatigue, the proliferation of dialogue channels, and difficulties reaching certain demographic groups, particularly younger adults and those in marginalized communities. The rise of mobile phone usage and the decline of landlines also pose challenges, as conventional survey methods are less effective in reaching individuals who primarily use cell phones.
In response to these challenges, U.S. data collection agencies are actively exploring choice methodologies. These include leveraging web-based surveys, utilizing administrative data from sources like tax records and unemployment insurance claims, and employing statistical techniques to adjust for non-response bias. The Census Bureau, such as, has increased its reliance on digital outreach and is experimenting with new survey designs to improve engagement.
Despite the concerns, a recent assessment published in March 2025 by economists at the Federal Reserve Bank of San Francisco offers a more tempered perspective. The research indicates that recent revisions to economic data have largely mirrored ancient patterns, suggesting that the decline in response rates has not necessarily led to a substantial deterioration in data quality. The study, authored by economists Yun Liu and Adam Hale Shapiro, analyzed revisions to key economic indicators and found that they were broadly consistent with pre-pandemic trends.
However, the researchers caution that ongoing monitoring is crucial, and that the long-term effects of declining response rates remain uncertain. They emphasize the importance of continued investment in data collection infrastructure and the development of innovative survey methods to ensure the continued accuracy and reliability of economic statistics. The Federal Reserve Bank of San Francisco’s research highlights the need for a nuanced understanding of the issue, acknowledging both the challenges and the potential for mitigation.
