Elon Musk’s Governor may have done much of the federal bureaucracy, but the tricky flow of Musk’s chainsaw contributed to the decline of the Labor Statistics Commissioner’s now launched job revisions.
Mark Zandi, chief economist at Moody’s Analytics, told Moody’s Analytics that the Governor’s cuts to the government are contributing to downward job revisions, as the government usually reports its payroll to the Bureau of Labor Statistics (BLS), and more and more reports often lead to larger revisions. wealth. He noted that the government did not report on the preliminary employment estimates provided by the BLS in a timely manner.
“It doesn’t matter when government jobs are stable, but now government jobs are declining and the cuts in the revision are being accepted,” Zandi said. He added that the impact of Doge also extends to the statistical agencies themselves, including the BLS, where employees reduce the processing of job records slows down and leads to larger subsequent revisions.
According to BLS Employment Report (Published on August 1) shows a modest increase in 73,000 jobs. What’s more striking is that the work proceeds from May and June combined with a total of 258,000. Employment rose by only 19,000 in May, while employment rose by 14,000 in June, with an average three-month wage increase falling to just 35,000, to 123,000 a year ago.
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Regarding the economy, Pantheon’s macroeconomics found that layoffs knocked out about 0.3 percentage points in the second quarter GDP growth, mainly due to a 11.2% drop in federal non-defense spending, which is a direct result of a reduced Doge (government efficiency). Analysts believe government spending will remain roughly flat in the third quarter, as small gains from state, local and defense spending were down by 5 to 10% by the federal non-defense component.
Zandi believes that sustained threshold cuts increase the chances of a recession. “Leasing may be more corrosive to the economy than cliff events, leading to an economic recession,” he said. At the same time, policies such as higher tariffs or restricted immigration rules may have a greater and destructive impact on the economy, which may directly lead to a recession.
Apart from the numbers, Zandi also marks a deeper risk arising from the reduction in Doge’s workforce. He warned that cutting efforts at statistical agencies have reduced the quality of federal data, a symptom of the wider unintended consequences of government services.
“The important work of government staff is crucial to providing important services to taxpayers,” Zandi said. “If there are no layoffs, no provision or provision of these services, or not timely and competently, there can be significant negative impacts.”
He cited examples from important weather reports to disaster responses to food security inspections that maintain national food supply.
