“What we see is that 70% of them have a bachelor’s degree or above,” Stahle said. “This is a really educated group of job seekers.”
Stahle noted that the influx is happening amid a historically weak market for such sectors, saying: “It’s going to increase the competitiveness of the labor market.”
In addition, jobs affected by cuts are often highly specialized. “If you are a displaced USDA worker with a background in horticulture, you know, what do your prospects look like right now?” Stahle said.
Job searchers, who Stahle said tended to be mid- to senior level, also were in their current jobs for longer, with an average tenure of 11 years, according to federal data.
Treasury Secretary Scott Bessent indicated Monday that fired workers will get the chance to look for jobs in the private sector, but the shocks could extend beyond job-seeking.
Unemployment, among other data points, is an early indicator of recessions. Thus far, it — along with other relevant data points, such as the yield curve and consumer spending — have held relatively steady. But plunging consumer sentiment could be a signal of what’s to come.
Economist Claudia Sahm, a former Federal Reserve and White House economist who created a widely used indicator, the “Sahm Rule,” to identify oncoming downturns through unemployment, cautioned that cuts could damage consumer spending. That’s even among those who are not directly affected.
“Many of them won’t lose their job, because we do need a certain number of federal workers to make everything go,” Sahm told NBC News. “But at this point there are a lot of people who are very uncertain from day to day what their employment is.”
“Are they going to go out and buy a house? Are they going to go buy a car?” Sahm asked, sharing a gray outlook for consumer spending: “The very rational response would be don’t go out and buy stuff.”
The overall risk to the economy is small, Sahm said, because federal workers made up less than 2% of the overall U.S. labor force. But she warns that while DOGE alone might not cause a recession, it could lead to one.
“The fast-moving process of DOGE is adding unnecessarily to the risks,” Sahm said on her blog. “Once they take hold, recessionary dynamics are difficult to avoid and costly to ‘fix.’”
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