“Unpacking March’s Surging Layoff Rates: How DOGE Influenced Job Cuts to Their Third-Highest Level Ever” | CNN Business

More than 275,000 layoffs were reported last month, a number we haven’t seen since the pandemic. The bulk of these layoffs, nearly 80%, came from the federal government, according to a report from Challenger Gray & Christmas. This surge in job cuts marks a significant shift, with layoffs up 60% from February and a staggering 205% compared to March 2024.

The main responsible party here is the Department of Government Efficiency (DOGE). They initiated plans to eliminate over 216,000 positions, making it the largest single employer loss in the reports. Andrew Challenger, a senior vice president at Challenger Gray & Christmas, commented that without these federal job cuts, March would have been a relatively quiet month for layoffs.

In addition to government job cuts, the technology and retail sectors also saw significant layoffs, contributing to a total of 59,025 cuts from industries outside the federal government. It’s important to mention that the reported layoffs do not immediately impact the job market. Many federal workers are still being compensated during notice periods, meaning the full effects might not unfold for some time.

Challenger’s report focuses on announced layoffs rather than confirmed job losses, which suggests a waiting game is at play. Just because these job cuts are planned doesn’t mean they will happen immediately, or at all.

The ripple effects of these layoffs could be felt throughout local economies and communities. Cutting jobs in the public sector can have far-reaching effects, as Gregory Daco, chief economist at EY-Parthenon, pointed out. He explained that indiscriminate government spending cuts can harm the overall economy, impacting not just federal workers, but the private sector as well.

Historically, significant layoffs often correlate with economic shifts. For context, we can look back at the aftermath of the 2008 financial crisis when mass layoffs also led to more severe economic repercussions. Today’s situation provides a lens to compare current federal job reductions with past trends and their subsequent impacts on the job market.

According to recent Labor Department data, Americans are staying unemployed longer, with claims for unemployment insurance reaching their highest level since November 2021. The number of continuing claims climbed to 1.9 million for the week ending March 22, showing that people are struggling to find work.

First-time claims for unemployment benefits decreased slightly, which is positive, but these trends don’t yet reflect federal workers who are tracked separately. In the same week, 564 federal employees filed for unemployment benefits, which is a decrease but still significantly higher than last year.

Despite the upheaval in the federal job market, the overall U.S. economy has shown resilience. The job market has remained robust over the years, which has kept consumer confidence steady, even amid rising inflation and interest rates.

Looking ahead, the upcoming jobs report from the Bureau of Labor Statistics will be key in understanding how all these changes will affect the broader labor market. It may also reveal the ongoing effects of recent federal policy changes.

In sum, the current wave of layoffs is significant and could lead to further economic challenges down the line. Understanding the full impact will require close monitoring of both government actions and labor market responses.

For more information on trends and conditions affecting the job market, you can refer to the Bureau of Labor Statistics for updates on employment data and policies.

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