[ZeroHedge] The Trump administration's epic purge of federal workers is shaping into one of the most significant job cuts in a generation. Early indicators suggest Northern Virginia, Washington, DC, and Maryland may be in the beginning innings of an economic downturn, as jobless claims rise and a surge in active housing listings signals a very ominous outlook.
On Thursday morning, Torsten Slok, chief economist at Apollo, joined Bloomberg TV, warning, "The consensus expects total DOGE-related job cuts to be 300,000 ... However, studies show that for every federal employee, there are two contractors."
Dominic Konstam, head of macro strategy at Mizuho, asked: "DoGE-led recession risk?"
The market is focused on a negative economic fallout from Federal spending cuts. The level of potential Federal job losses is too small to derail growth, but overall government spending has been egregiously high in recent years. There has also been excessive job growth in the "government" sectors, including federal, state, and local government, as well as in education and health. If DoGE sets a precedent on jobs and achieves spending cuts that ricochet through the quasi-public sector, it is likely that new economic headwinds will develop.
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