Economist: The economic impact of large-scale layoffs by the U.S. government may be limited

ChainCatcher news, under the direction of the U.S. Department of Efficiency, federal agencies in the United States have recently been laying off employees in succession. Despite the increasing number of lawsuits, the government's cuts in funding and personnel seem likely to continue.

So far, the long-term impact remains unclear. While the market has reacted negatively to policies such as tariffs, investors do not seem concerned about the federal layoffs; the S&P 500 index has set new highs twice in the past week alone. There are 3 million federal government employees, accounting for about 1.9% of total U.S. employment excluding the military. According to Piper Sandler, as of last Friday, 29,000 federal workers have been laid off. So far, economists have not issued any warnings about this.

Stephen Stanley, an economist at Santander Bank, stated, "Federal government layoffs may not have a significant impact on the economy." "Perhaps the federal government's monthly employment numbers will decrease by 5,000 to 10,000 compared to normal, but many of those people should quickly find jobs elsewhere."