Economic analyst details 'negative numbers' DOGE layoffs may create for US economy

06 March

Many critics of the Trump Administration's mass layoffs of federal government workers — which are being carried out with the help of the Elon Musk-led Department of Government Efficiency (DOGE) — are arguing that layoffs will be bad for the economy. When tens of thousands of federal workers suddenly become unemployed, DOGE critics warn, they quit spending money.

During a Thursday, March 6 broadcast of CNBC's "Squawk Box," host Andrew Ross Sorkin discussed the possible economic impact of the layoffs with colleague Steve Liesman.

When Sorkin asked Liesman "how much DOGE" could affect the federal jobs report coming out on March 7, Liesman responded, "It's a tricky story here. But first, let me tell you, Andrew: announced layoff in February is surging 245 percent to the highest level since the pandemic — with the Trump Administration's efforts to reduce the federal workforce playing not the only, but the biggest part in that."

Liesman added, "The outplacement firm Challenger, Gray & Christmas, they're saying that announced February layoffs — not actual layoffs, but announced ones — rose to 172,000, up from just 49,000 in January. It's the highest monthly number since July 2020, the worst February since 2009."

The CNBC reporter noted that the layoffs are a "mix" of the "government and the private sector."

Liesman told Sorkin, "The DOGE impact was the top reason cited for job cuts, followed by market and economic conditions and then bankruptcy. The bulk of government job cuts are likely too recent to show up in tomorrow's jobs report. Workers won't be counted as unemployed until their severance runs out."

Liesman continued, "But remember, roughly 30,000 federal workers — they leave their jobs monthly in a normal month. So the hiring freeze announced by President Trump on Day 1 of his presidency — that could mean vacated jobs won't be filled. That could create some negative numbers that could drag down the headline number even as soon as tomorrow."

According to Liesman, the "ultimate economic impact" of the Trump Administration/DOGE layoffs "depends on whether the private sector finds job for those workers" and "can make up for those job losses."

Watch the full video at this Mediaite link.

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