Economics

Washington D.C. unemployment spikes as Trump and Musk begin efforts to shrink the government

Published

1 month ago

February 15, 2025

Elon Musk listens to U.S. President Donald Trump speak in the Oval Office of the White House in Washington, D.C., U.S., Feb. 11, 2025.

Kevin Lamarque | Reuters

President Donald Trump’s moves to fire thousands of federal government workers have coincided with a surge in jobless claims in Washington D.C. that could get worse as the efforts intensify.

Since Trump has taken office, nearly 4,000 workers in the city have filed for unemployment insurance as part of a surge that began at the start of the new year, according to Labor Department figures not adjusted for seasonal factors.

In all, just shy of 7,000 claims have been filed in the six weeks of the new year, or about 55% more than in the prior six-week period. Filings rose to 1,780 for the week ending Feb. 8, a 36% increase from the prior week and more than four times around the same period in 2024.

By contrast, the total level of claims in the U.S. has been moving little, with the four-week moving average of initial claims at 216,000, little changed from the beginning of the year and actually trending lower for the most part over the past several months.

The jump in D.C. claims come as Trump and the Elon Musk-led Department of Government Efficiency advisory board have ordered layoffs across the government structure and instituted buyout programs for early retirement.

“I expect it to go higher, and definitely we’ll be watching it very closely,” said Raj Namboothiry, senior vice president at Manpower North America, the workforce solutions company.

While it’s unclear what share of the spike is directly related to federal government workers, the rise coincides with the White House ordering the layoffs of probationary employees along with thousands of others as the administration seeks a broad-based reduction in the labor force. In addition, some 75,000 employees have accepted the buyout offer.

Washington D.C. had one of the highest unemployment rates in the country at 5.5% as of December 2024, surpassed only by Nevada, according to the Bureau of Labor Statistics. However, the metropolitan area including the Arlington and Alexandria, Va., area was at just 2.7%. The national unemployment rate for the month was 4.1%, before slipping to 4% in January.

Broader labor picture still solid

Namboothiry said the reduction of the federal workforce could present some problems in the region, though it would do little to dent a national picture that he called “fairly stable.”

“Yes, the numbers are definitely sizable,” he said. “But because you’re spread across multiple [geographies], multiple skill sets, multiple sectors, I don’t see that playing a significant role in impacting the overall market.”

There are about about 2.4 million federal workers, excluding post office employees, with nearly one-fifth employed in the D.C. area and the others spread around the country. Outside of spikes around tax season, the number has held fairly constant since the late 1960s.

Still, Trump has targeted the federal employment rolls as a major part of his effort to shrink the size of government.

Displaced employees may not be out of work long, however. Namboothiry thinks their skill sets could be in high demand for certain sectors of the economy.

“This presents an opportunity, because there are clients who are looking for talent that’s exiting that may benefit,” he said. “There’s going to be some conversations around an interest from employers with this pool of talent.”

The cuts that Trump are targeting are spread around the government, with some agencies expecting dramatic cutbacks.

How those displaced employees fare will depend on their fields of work, said Allison Shrivastava, economist at the Indeed Hiring Lab.

“It might be that very few of them remain without work,” she said. “It definitely depends on sector. So for example, if you are, As Trump ramps up layoffs, unemployment claims start to spike in Washington, D.C. you’re in the accounting sector right now, that’s a sector that, in terms of job postings, we’ve seen perform pretty well. Say you’re in software development … those jobs have not been as in demand. The level of difficulty that you would have in finding a job would really be contingent on the sector that you’re in.”

Up Next

Checks and Balance newsletter: Donald Trump’s pick-and-choose federalism

Don't Miss

Retail sales slumped 0.9% in January, down much more than expected

Economics

White House denials over the Signal snafu ring hollow

Published

5 hours ago

March 26, 2025

Business Finance News

THE ROW over Mike Waltz’s security slip-up rages on. On March 11th America’s national security adviser accidentally added Jeffrey Goldberg, the editor-in-chief of the Atlantic, a magazine, to a group chat on Signal, an encrypted messaging app. Days later Mr Waltz and a succession of American officials including J.D. Vance, the vice-president, Pete Hegseth, the secretary of defence, Tulsi Gabbard, the director of national intelligence, and John Ratcliffe, the director of the CIA, used the group to discuss air strikes on Yemen. How serious a breach was this?

Economics

Former Treasury Secretary Janet Yellen to join global advisory board for bond giant Pimco

Published

8 hours ago

March 26, 2025

Business Finance News

Treasury Secretary Janet Yellen speaking with CNBC’s Sara Eisen (not shown) at the U.S Treasury Department on Jan. 8th, 2024.

CNBC

Former Treasury Secretary Janet Yellen will be joining an advisory board for bond giant Pimco, CNBC has learned.

Joining other prominent officials in the world of economics and finance, Yellen, who also served as Federal Reserve chair, will serve on the board that meets several times a year, according to the report from Leslie Picker.

The advisory board members’ mission, according to the Pimco website, is to “contribute their insights to the firm on global economic, political and strategic developments and their relevance for financial markets.”

Current members include Gordon Brown, the former UK prime minister; ex-White House chief of staff Joshua Bolten; Michèle Flournoy, former defense policy advisor under two U.S. presidents, and Raghuram Rajan, an economist and former governor for the Reserve Bank of India.

In addition, former Fed Chair Ben Bernanke also served as a senior advisor at Pimco, and Richard Clarida, who had served as the central bank’s vice chair, is a managing director in the firm’s New York office.

Yellen served as head of Treasury during all four years of the Biden administration, and before that was Fed chair from 2014-18. She was the first woman to hold the respective posts. Prior to taking the Treasury post, she served a stint as a distinguished fellow at the Brookings Institution think tank.

Pimco, based in Newport Beach, Calif., manages about $2 trillion for clients and once ran the largest bond fund in the world. Yellen has a past with the firm, reporting once that she collected a $180,000 speaking fee at the firm in 2019.

Get Your Ticket to Pro LIVE

Join us at the New York Stock Exchange!
Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.

In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.

Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Economics

Treasury Department is set to lay off a ‘substantial’ number of employees, official says

Published

12 hours ago

March 26, 2025

Business Finance News

People take pictures of the U.S. Treasury Department building in Washington, D.C., on Feb. 6, 2025.

Mandel Ngan | AFP | Getty Images

The Treasury Department is planning to furlough a “substantial” level of its workforce in conjunction with Elon Musk’s efforts to shrink the size of the federal government, according to a court document.

As part of a complaint in a related case, Trevor Norris, the department’s deputy assistant secretary in human resources, indicated that the layoffs will be coming as part of the Department of Government Efficiency’s ongoing moves to cut the federal employee rolls.

In a sworn statement, Norris said Treasury is wrapping up plans to comply with President Donald Trump’s executive order backing DOGE’s activity. Treasury currently has more than 100,000 employees.

“These plans will be tailored for each bureau, and in many cases will require separations of substantial numbers of employees through reductions in force (RIFs),” Norris said in an affidavit.

The case involves a complaint by the state of Maryland to get a stay on the layoffs. In recent days, three judges have issued restraining orders putting temporary halts on DOGE’s efforts to hit several departments.

“The Treasury Department is considering a number of measures to increase efficiency, including a rollback of wasteful Biden-era hiring surges, and consolidation of critical support functions to improve both efficiency and quality of service,” a Treasury spokesperson said. “No final decisions have yet been made, and any current reporting to the contrary is false.”

Bloomberg News first reported the planned layoffs.

Get Your Ticket to Pro LIVE
Join us at the New York Stock Exchange!
Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.