United States: A prominent economist predicts the layoffs from the Department of Government Efficiency (DOGE) operated by Elon Musk could reach much higher numbers than most predict due to growing economic risks affecting both the economy and market performance, which President Donald Trump has always measured as his success marker.
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According to Torsten Slok, chief economist at Apollo Global Management, “We are starting to worry about the downside risks to the economy and markets,” forbes.com reported.
Researchers predict a million DOGE-related job losses will occur, according to Slok, because the often reported 300,000 potential job cuts fail to consider the secondary impact on the 5.2 million people employed through federal contracts whose positions are at risk by simultaneous attack of government contracts and grants from Elon Musk and President Donald Trump.
Furthermore, Slok, who predicted a rise in the unemployment rate linked to government job cuts, said, “The near-term downside risks to the economy and markets are growing.”
Federal employees layoffs
The federal government employed more than 75,000 personnel through voluntary buyouts, and it conducted 220,000 potential probationary worker layoffs in organizations like the Internal Revenue Service and Forest Service.
The employment reductions constitute a rare occurrence in modern United States history because they resemble the adjustments carried out by former President Bill Clinton during his term.
The economy remains in a broad state of strength because unemployment reached 4 percent in January, and fourth-quarter economic output increased by 2.3 percent, which corresponds to typical historical numbers, forbes.com reported.
What more are the experts stating?
Source data from the System for Award Management demonstrates Lockheed Martin RTX and General Dynamics, together with a number of non-defense contractors Dell, Deloitte, Microsoft, and Pfizer, secured over USD one billion in each firm’s government contracts during 2023.
The combination of increased joblessness from DOGE layoffs and diminished GDP expansion because of reduced stimulus poses negative influences on financial markets, yet Michael Wilson from Morgan Stanley thinks such harsh effects will give way to an enduring market gain driven by fiscal stability.
DOGE’s operations will create economic slowing initially, yet long-term economic enhancement will be established as businesses expand and higher interest rates become feasible, according to Wilson in his client presentation on Monday.