Federal authorities employment falls by 10,000 in February as DOGE cuts slowly make affect on US labor market

The affect of the US authorities’s effectivity drive is slowly starting to point out up in labor market knowledge.

Federal authorities employment fell by 10,000 in February, in line with knowledge launched by the Bureau of Labor Statistics on Friday, a decline from the 9,000 federal jobs added final month as Elon Musk’s Division of Authorities Effectivity (DOGE) continues efforts to pare again the dimensions of the federal workforce.

In whole, authorities jobs contributed simply 11,000 to the whole nonfarm payroll beneficial properties of 151,000 seen in February.

That is down from the upwardly revised 44,000 authorities jobs added in January and the roughly 38,000 common month-to-month acquire seen all through the course of final yr.

Friday’s report additionally comes as different labor market measures level to a slowdown in federal hiring.

On Thursday, job placement agency Challenger, Grey & Christmas confirmed job cuts soared in February to 172,017, their highest month-to-month stage since July 2020. The agency particularly cited cuts from DOGE.

Separate knowledge from the Division of Labor, additionally launched Thursday, confirmed 1,510 weekly unemployment claims had been filed within the District of Columbia within the week ending March 1. That is down from the 1,893 reported claims filed within the prior-week interval however nonetheless considerably elevated in comparison with knowledge over the previous yr.

A federal hiring freeze was put in place on Jan. 20, and economists have stated DOGE-related job cuts from authorities employment or layoffs associated to canceled authorities contracts probably will not totally present up in employment numbers till later this yr.

Moreover, about 75,000 federal staff took a buyout supply from the Trump administration, which suggests they may accumulate a paycheck via early fall and might be thought-about “employed” for the needs of those and different reviews till that point.

RSM chief economist Joe Brusuelas advised Yahoo Finance on Friday he isn’t involved in regards to the labor market’s future as soon as the DOGE-related layoffs are totally priced into the info.

“We’ve a really tight labor market,” Brusuelas stated. “Labor imported from the exterior tech sector has slowed mainly to zero, so that you’re simply not going to see a surge in unemployment as a result of federal authorities hiring slows to zero or cuts.”

Others have stated DOGE is a large threat to the expansion story of the US economic system given the sheer variety of contract and federal staff.

“[DOGE] is off to an aggressive begin and that is additionally probably a headwind to development initially, as federal spending and headcount is lowered,” Morgan Stanley analyst Mike Wilson wrote in a word to shoppers late final month.