Federal Job Cuts Won’t Change Unemployment

By Douglas A. McIntyre Published Feb 24, 9:15AM EST

Quick Read

Jobs cuts among federal employees are unlikely to boost the unemployment rate much.
Combined with layoffs due to tariffs, though, that might be a different story.
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Federal Job Cuts Won’t Change Unemployment — © Deagreez / iStock via Getty Images

According to the Bureau of Labor Statistics, the civilian U.S. labor force is just above 170 million people. That means that each percentage point of unemployment represents about 1.7 million Americans. The total number of federal employees is 3 million, excluding active members of the military. The figure is just above 1.8% of the total employed population. Elon Musk and President Trump cannot fire all these people, or even come close. Too many are essential to the operations of the federal government.

If cuts reach 10% of all federal employees, unemployment would rise by about 300,000 people. Unemployment, which was 4% in January, might rise to 4.3% or 4.4% at the most. That is about the same increase as in June 2024. The reason given then by most economists was fear of a recession, brought on by high inflation. Inflation began to cool, and the jobless rate began to improve.

Another factor could make unemployment rates jump. However, this is outside the federal employee count. A 25% tariff on goods and services coming from Canada and Mexico, combined with 10% on imports from China, followed by retaliation from those countries, would eliminate 400,000 U.S. jobs.

So, job cuts among federal workers would not change the jobless rate in the United States much. Combined with layoffs due to tariffs, on the other hand, that may be a different story.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.