DOGE fallout: Half a million US jobs on the line

Washington: The Trump administration's rapid efforts to dramatically shrink the size of the federal government have economists rethinking forecasts for another solid year of labour market expansion in 2025.

Already, Bloomberg Economics estimates tens of thousands of federal jobs have been cut in the six weeks since President Donald Trump took office. Comerica Bank, Evercore ISI and Barclays are among firms who say total job losses could top half a million by the end of the year.

That number, which includes knock-on effects in the private sector, would effectively reverse a quarter of all job growth in 2024. The government's monthly report on US employment for February due Friday may show limited signs of the damage, though the impact is set to become more apparent in March and April.


"If these numbers on federal workers turn out to be accurate, and if you include the grantees and the contracts, these numbers are going to be significant," said Harry Holzer, a Georgetown University professor and former Labor Department chief economist.

A report published Thursday by the outplacement firm Challenger, Gray & Christmas showed job cuts announced by employers rose last month to the highest level since 2020, and weekly data on filings for unemployment insurance showed a surge in claims from laid-off federal workers.