Early Signs of Economic Impact from Trump’s Cuts to the Federal Workforce

An attendee places their resume in a drop box at the Albany Job Fair in Latham, New York, on October 2, 2024. Photographer: Angus Mordant/Bloomberg.

Today’s report on applications for U.S. unemployment benefits may be the first place to see the effects of the Trump administration’s sweep of the federal workforce. It will just be the start.

Initial jobless claims were already on the rise in and around Washington, D.C., and economists have begun bracing for broader impact. So far, President Donald Trump and Elon Musk’s Department of Government Efficiency has fired more than 10,000 government workers, based on press reports. Approximately another 200,000 probationary workers are also being targeted. Then there’s a multiplier effect that ripples out to millions of federal contractors and others who do business with Washington, plus state and local governments and organizations that rely on its services. And it’s not just the direct hit to employment; layoffs have the potential to further dent housing activity as well as broader economic growth.