Accuracy of Government Data In Question – Government Data Gathering

Employment data gathered and complied by the Bureau of Labor Statistics have once again come into question as the accuracy of the data continues to be an issue. The employment data includes responses that are gathered through surveys nationwide, which were adversely affected by the pandemic and have experienced a decline in accuracy over the past five years.

Data are collected through surveys that cover aspects of the employment market, including layoffs, new hires, sentiment, wages, and employee resignations. The onset of the pandemic led to a reduction in the number of surveys conducted and disrupted traditional data collection methods. A consistent decline in survey participation over the past five years has resulted in less data being collected and raised concerns about the reliability of the information.

Economists and analysts are concerned that the drop in surveys and continued data quality issues may be preventing the Federal Reserve from making accurate and timely decisions surrounding the status of the nation’s labor market. Response rates for direct employment data conducted via interviews have fallen from roughly 65% in 2015 to less than 40% in the first quarter of 2025. There has also been a consistent drop in consumer interviews and expenditure tracking. This means there is less data available to support accurate and reasonable assumptions, increasing the risk of making erroneous decisions regarding rates and the labor market by the Federal Reserve. (Sources: Labor Dept., BLS)

Which Countries Are Buying & Selling U.S. Treasuries – Treasury Market Overview

Foreign countries hold U.S. government debt in the form of Treasury bonds for various reasons, including trade, currency hedging, and investment. At one point, China was the largest foreign holder of U.S. Treasuries as trade between the two countries expanded throughout the 1990s and 2000s. Japan eventually surpassed China in 2017, as bilateral trade grew and China began limiting its holdings of U.S. debt. As of March 2025, China’s holdings dropped to $757.2 billion, down from $784.3 billion the previous month and significantly lower than the $901.7 billion held in September 2022. Analysts attribute this reduction to a combination of trade tensions, reserve diversification, and a possible shift toward other markets. Japan remains the largest foreign holder of U.S. Treasuries, with holdings rising to $1.13 trillion in March 2025, up from $1.059 trillion in December 2024. Japan’s purchases have increased for at least two consecutive months, signaling continued confidence in U.S. debt and the long-term trading relationship. The U.K. has also increased its holdings, surpassing China as the second-largest non-U.S. holder, with $807.7 billion in March 2025. The U.K. is often considered a custodial center, with much of the activity reflecting hedge fund and institutional flows. (Source: U.S. Treasury Dept.)

One Big Beautiful Bill Act Highlights

Estate Tax Exclusion:

The exclusion increases to $15 million for single filers and $30 million for married filers in 2026, with further inflation-indexed increases after that year. This provision differs from prior estate tax exclusion rules in that the bill makes the increase “permanent”—meaning no automatic sunset or expiration date has been imposed. The current exemption of $13.61 million for individuals and $27.22 million for married couples was set to be reduced by half at the end of 2025.

Interest Deduction On Auto Loans:

Interest on auto loans is deductible but applies only to new vehicles with final assembly in the U.S., for tax years 2025 through 2028. The deduction is limited to $10,000 and phases out when income exceeds $100,000 for single filers and $200,000 for joint filers.

Tax On Overtime Pay:

This deduction, capped at $12,500 for individuals and $25,000 for joint filers, phases out for higher earners and is set to expire on December 31, 2028. While it doesn’t eliminate taxes on overtime pay, it provides a tax break for those working extra hours—potentially increasing take-home pay.

Trump Accounts:

These are tax-deferred investment accounts for American children born in the U.S. between January 1, 2025, and December 31, 2028. Each newborn will receive a one-time government contribution of $1,000. The accounts will track a stock index and allow parents or family members to make additional private contributions of up to $5,000 per year.

Account holders may make partial withdrawals at age 18 and access the full amount at age 25, but only for specific purposes, such as paying for higher education or taking a loan to start a small business. Full, unrestricted access is granted at age 30. Parents or legal guardians manage the account until the child turns 18.

To open an account, the child’s guardian or parent must have a Social Security number and be authorized to work in the U.S.

The initial $1,000 provided by the government is a contribution—not a tax credit in the traditional sense for taxpayers who contribute to the account. There are no tax deductions for contributions, and earnings are taxed as ordinary income.

Expanded 529 Plan Provisions:

The bill expands the definition of qualified expenses for 529 plans beyond traditional higher education and K–12 tuition to include a broader range of educational and career development opportunities, such as vocational, trade, and technical schools. Newly eligible expenses include tuition, books, fees, exam costs, and supplies for workforce training, on-the-job training, and continuing education programs.

The $10,000 per-year limit for K–12 tuition and the $10,000 lifetime limit for student loan repayments remain in place. The federal tax treatment of 529 plan growth—as well as in-state tax deductions and credits—remains unchanged.