For all the angst and optimism about the potential for DOGE to make progress in cutting government largess, it has yet to show up in the numbers in a truly meaningful way. And it brings up the idea of “what if the US government were run like a business?” That is a useful mental exercise. Because it brings to the fore just how much there is to do for DOGE to create headway or for the shifts to hit the official data.
Placing some perspective on the labor market, one of the most striking shifts in the post-pandemic period has been the relative lack of layoffs. There have certainly been many layoffs that have made the news. But they have not made the data. Employers became increasingly aware that labor was willing to shift if wages and working conditions were not met. That created the labor hoarding dynamic. While it’s rumored to be dead with the rise of DOGE, that might not the case.
It remains rather difficult to find employees. They are not in abundant supply. And wage demands have escalated. If an employee leaves, chances are that it will take quite a bit of time to replace them. Hence the continuation of labor hoarding. The primary upside of DOGE might be making it easier for employers to find labor in certain places for certain jobs.
But – in reality – it isn’t going to chance much of anything. The US economy has an incredible amount of turnover under the surface. A few million people a month in a healthy economy. Will a few hundred thousand (spread over numerous months) move the needle? Probably not. Will it continue to dominate headlines? Yes.
But the difference between mattering and being a bold, attention grabbing headline are two different things.
And – at least when it comes to the JOLTS survey and others done by survey region – the DOGE cuts are going to show up in the South. Many of the Federal employees live in Virginia, and that’s the place to look for the pain. It was yet to show up. If US economic vibrancy has anything to say about it, it’ll never show up meaningfully in the economic data. That’s the beauty of the US economy – even DoGE might not be enough to knock it off its growth trajectory.