Layoffs and Job Reductions

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Trump Says a Recession Would Be Worth It, but Economists Are Skeptical

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President Trump and his advisers say his policies may cause short-term pain but will produce big gains over time. Many economists are skeptical of those arguments.Presidents usually do all they can to avoid recessions, so much so that they avoid even saying the word.But President Trump and his advisers in recent weeks have offered a very different message. Yes, a recession is possible, they have said. Maybe one wouldn’t even be that bad.Howard Lutnick, the commerce secretary, has said Mr. Trump’s policies are “worth it” even if they cause a recession. Scott Bessent, the Treasury secretary, has said the economy may need a “detox period” after becoming dependent on government spending. And Mr. Trump has said there will be a “period of transition” as his policies take effect.Such comments may partly reflect an effort to align political statements with economic reality. Mr. Trump promised to end inflation “starting on Day 1” and declared, in his inaugural address, that “the golden age of America begins right now.”Instead, inflation has remained stubborn, and while Mr. Trump has been in office less than two months, economists warn that his tariffs are likely to make it worse. Measures of consumer and business confidence have plummeted and stock prices have tumbled, attributable in large part to Mr. Trump’s policies and the uncertainty they have caused.“It’s the kind of language that you use when your policy isn’t going great and you can see that it’s actively harming people,” said Sean Vanatta, a financial historian at the University of Glasgow in Scotland.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Policies Have Shaken a Once-Solid Economic Outlook

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    Economic forecasts have deteriorated in recent weeks, reflecting the upheaval from federal layoffs, tariff moves and immigration roundups.President Trump inherited an economy that was, by most conventional measures, firing on all cylinders. Wages, consumer spending and corporate profits were rising. Unemployment was low. The inflation rate, though higher than normal, was falling.Just weeks into Mr. Trump’s term, the outlook is gloomier. Measures of business and consumer confidence have plunged. The stock market has been on a roller-coaster ride. Layoffs are picking up, according to some data. And forecasters are cutting their estimates for economic growth this year, with some even predicting that the U.S. gross domestic product could shrink in the first quarter.Some commentators have gone further, arguing that the economy could be headed for a recession, a sharp rebound in inflation or even the dreaded combination of the two, “stagflation.” Most economists consider that unlikely, saying growth is more likely to slow than to give way to a decline.Still, the sudden deterioration in the outlook is striking, especially because it is almost entirely a result of Mr. Trump’s policies and the resulting uncertainty. Tariffs, and the inevitable retaliation from trading partners, will increase prices and slow down growth. Federal job cuts will push up unemployment, and could lead government employees and contractors to pull back on spending while they wait to learn their fate. Deportations could drive up costs for industries like construction and hospitality that depend on immigrant labor.“If the economy was starting out in quite good shape, it’s probably in less good shape after what we’ve seen the last few weeks,” said Donald Rissmiller, chief economist at Strategas, a research firm.A Strong FoundationThe U.S. economy has repeatedly shown its resilience in recent years, and there are parts of Mr. Trump’s agenda that could foster growth. Business groups have responded enthusiastically to Republican plans to cut taxes and reduce regulation. A streamlined government could, in theory, make the overall economy more productive.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fired Federal Workers Face a Sluggish Job Market

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    Unemployment is low, but there isn’t much room to move around — especially for those with highly government-specific skills.For about a year now, the labor market has existed in a state of eerie calm: Not many people were losing their jobs or quitting, but not many of those seeking work were getting job offers.The mass layoffs now underway across the federal government, along with its employees who are voluntarily heading for the exits, could disrupt that uneasy equilibrium.While unemployment is relatively low at 4 percent, those losing their positions could face a difficult time finding work, depending on how well their skills translate to a private sector that does not seem eager to hire.“Federal workers all across the country are starting to look, and it’s impacting people everywhere,” said Cory Stahle, an economist at the job search platform Indeed. “It’s hard to think this isn’t going to stress test the labor market in the coming months.”On the eve of the Trump administration, the federal government’s executive branch employed about 2.3 million civilians. It’s not clear how many of those will end up being cut, and how many will get their jobs back after lawsuits over those terminations work through the courts.But impact of the pace at which government spending is being slashed, along with instructions from the White House budget office for agencies to slice even deeper, could be meaningful.Are you a federal worker? We want to hear from you.The Times would like to hear about your experience as a federal worker under the second Trump administration. We may reach out about your submission, but we will not publish any part of your response without contacting you first.

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    Lutnick Remarks on Removing Government Spending in GDP Data Raises Fears

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    Comments from a member of President Trump’s cabinet over the weekend have renewed concerns that the new administration could seek to interfere with federal statistics — especially if they start to show that the economy is slipping into a recession.In an interview on Fox News on Sunday, Howard Lutnick, the commerce secretary, suggested that he planned to change the way the government reports data on gross domestic product in order to remove the impact of government spending.“You know that governments historically have messed with G.D.P.,” he said. “They count government spending as part of G.D.P. So I’m going to separate those two and make it transparent.”It wasn’t immediately clear what Mr. Lutnick meant. The basic definition of gross domestic product is widely accepted internationally and has been unchanged for decades. It tallies consumer spending, private-sector investment, net exports, and government investment and spending to arrive at a broad measure of all goods and services produced in a country.The Bureau of Economic Analysis, which is part of Mr. Lutnick’s department, already produces a detailed breakdown of G.D.P. into its component parts. Many economists focus on a measure — known as “final sales to private domestic purchasers” — that excludes government spending and is often seen as a better indicator of underlying demand in the economy. That measure has generally shown stronger growth in recent quarters than overall G.D.P. figures.In recent weeks, however, there have been mounting signs elsewhere that the economy could be losing momentum. Consumer spending fell unexpectedly in January, applications for unemployment insurance have been creeping upward, and measures of housing construction and home sales have turned down. A forecasting model from the Federal Reserve Bank of Atlanta predicts that G.D.P. could contract sharply in the first quarter of the year, although most private forecasters still expect modest growth.Steady Growth, From Private and Government SpendingGovernment spending has contributed to G.D.P. growth in recent quarters, as private-sector growth has remained solid.

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    Quarterly change in inflation-adjusted gross domestic product
    Notes: Change shown as seasonally adjusted annual rate. Private sector is total gross domestic product excluding government spending and investment. Government spending excludes transfer payments, including stimulus checks during the Covid-19 pandemic.”Source: Bureau of Economic AnalysisBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Who Are the Probationary Federal Workers Being Cut Under Trump?

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    Many government workers being cut are those with fewer protections. They are relatively new in their current jobs, but often have years of experience.In news about the Trump administration’s job-slashing effort, one class of federal workers comes up repeatedly: “probationary” employees.At the Internal Revenue Service, 6,700 people with that status are being let go. At the Department of Health and Human Services, reports indicated the total could be 5,200. The Pentagon announced last week that it would terminate 5,400. At the Forest Service, 3,400 may be cut.These workers, who generally have less than one or two years of service in their current positions, are particular targets among civil servants because they have the weakest protections. Here’s what else we know about the people being shown the door.What does being on ‘probation’ mean?Under the federal code, civil servants remain on probation for one year after they are hired, promoted, demoted or otherwise reassigned. Those in the “excepted” service, meaning they don’t go through normal competitive selection processes, can be on probation for two years.While on probation, a federal employee can essentially be fired at will, although the person’s superiors need to show that the employee’s “work performance or conduct fails during this period to demonstrate his fitness or his qualifications for continued employment.” (Many termination notices included language about the employee’s supposedly inadequate performance, typically without evidence.) Probationary employees may also appeal if they believe they were fired for partisan political reasons or on the basis of unlawful discrimination.After employees have completed their probation period, they gain more rights to appeal a termination to the Merit Systems Protection Board. Under those rules for due process, the agency must show that an employee wasn’t doing the job, or that the job was no longer necessary.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Hiring Slowed to 143,000 Jobs in January

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    U.S. employers added 143,000 jobs last month, somewhat fewer than forecast, while unemployment fell to 4 percent and hourly earnings rose.Can a labor market be hot and cool at the same time? That’s the picture painted by the latest federal hiring figures, which show a step down in job creation last month — as well as a drop in joblessness.Employers added 143,000 jobs in January, slightly fewer than expected, the Labor Department reported on Friday. But with large upward revisions to the prior two months and a decline in the unemployment rate to 4 percent, American workers still appear to be in good shape.“We have robust fundamentals, and relatively moderate hiring, but it’s very judicious,” said Gregory Daco, the chief U.S. economist with the accounting firm EY-Parthenon. “The unemployment rate is historically low, but frozen in the sense that you’re not seeing much churn — businesses are being cautious as to how they manage their work force.” More

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    Trump’s Canada and Mexico Tariffs Could Hurt Carmakers

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    General Motors and a few other companies make as much as 40 percent of their North American cars and trucks in Canada and Mexico, leaving them vulnerable to tariffs.Almost all automakers are going to feel a pinch from the new tariffs imposed by President Trump on Saturday on goods imported from Canada, Mexico and China.Auto manufacturers ship tens of billions of dollars worth of finished automobiles, engines, transmissions and other components each week across the U.S. borders with Canada and Mexico. Billions of dollars more are imported from parts manufacturers in China.The tariffs, which will take effect at 12:01 a.m. on Tuesday, are widely expected to raise the prices that American consumers pay for new automobiles. And the tariffs come at a time when new cars and trucks are already selling for near record prices.General Motors, the largest U.S. automaker, will probably be most affected.G.M. produces many more vehicles in Mexico than any other manufacturer — over 842,000 in 2024, according to MarkLines, an auto-industry data provider. And some of those vehicles are the most important in the company’s lineup.All of the Chevrolet Equinox and Blazer sport-utility vehicles G.M. sells in the United States come from Mexico. The Chevrolet Silverado pickup truck, a top-selling model, and the similar GMC Sierra pickup generate huge profits for the company. Of the more than one million of those trucks built last year, nearly half were produced in Canadian and Mexican plants, data from MarkLines shows.All told, G.M. plants in Canada and Mexico produced nearly 40 percent of all vehicles the company made last year in North America, the region where it gets most of its revenue and almost all of its profits.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Employers Add 256,000 Jobs in December

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    A December gain of 256,000 blew past forecasts, and unemployment fell to 4.2 percent. But markets recoiled as interest rate cuts seemed more distant.Employers stuck the landing in 2024, finishing the year with a bounce of hiring after a summer slowdown and an autumn marred by disruption.The economy added 256,000 jobs in December, seasonally adjusted, the Labor Department reported on Friday. The number handily beat expectations after two years of cooling in the labor market, and the unemployment rate edged down to 4.1 percent, which is very healthy by historical standards.The strong result — unclouded by the labor strikes and destructive storms of previous months — may signal renewed vigor after months of reserve among both workers and businesses. Average hourly earnings rose 0.3 percent from November, or 3.9 percent over the previous year, running well above inflation.“This employment report really crushes all expectations,” said Scott Anderson, chief U.S. economist at BMO Capital Markets. “It kind of wipes out the summer slump in payrolls we saw from June to August before the big Fed rate cut in September.”The apparent turnaround in employment growth, however, dampens chances of further interest rate cuts in the coming months. Investors already expect Federal Reserve officials to hold steady at their meeting in late January. For monetary policymakers, the robust growth means that additional easing could reignite prices and stymie progress on inflation.“The Fed is like, ‘We think this is a good labor market, we want to keep it that way, we don’t want it cooling further,’” said Guy Berger, director of economic research at the Burning Glass Institute. “What they haven’t said is, ‘We want to heat the labor market back up.’”Unemployment rate More

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    Port Workers Could Strike Again if No Deal Is Reached on Automation

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    Cargo could stop flowing at East and Gulf Coast ports, which handle most imports, if a union and an employers’ group can’t agree on the use of machines that can operate without humans.Ports on the East and Gulf Coasts could close next week if dockworkers and employers cannot overcome their big differences over the use of automated machines to move cargo.The International Longshoremen’s Association, the union that represents dockworkers, and the United States Maritime Alliance, the employers’ negotiating group, on Tuesday resumed in-person talks aimed at forging a new labor contract.After a short strike in October, the union and the alliance agreed on a 62 percent raise over six years for the longshoremen — and said they would try to work out other parts of the contract, including provisions governing automated technology, before Jan. 15.If they don’t have a deal by that date, ports that account for three-fifths of U.S. container shipments could shut, harming businesses that rely on imports and exports and providing an early test for the new Trump administration.“If there’s a strike, it will have a significant impact on the U.S. economy and the supply chain,” said Dennis Monts, chief commercial officer of PayCargo, a logistics payments platform.The union is resisting automation because it fears the loss of jobs at the ports. President-elect Donald J. Trump lent his support to the union’s position last month. “I’ve studied automation, and know just about everything there is to know about it,” he said on his website Truth Social. “The amount of money saved is nowhere near the distress, hurt, and harm it causes for American Workers, in this case, our Longshoremen.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More