Atlanta Fed predicts 1.2 million job cuts in US federal workforce

According to a study by the Federal Reserve Bank of Atlanta, the US federal workforce could shrink by around 1.2 million employees, with most cuts hitting contract and grant-funded positions. Melinda Pitts, a researcher at the bank, warns that such massive layoffs could hurt the American labor market.

According to layoffs.fyi, President Donald Trump’s initiative to reduce government spending has already led to 136,000 federal job cuts, with another 170,000 layoffs expected soon.

While the Atlanta Fed's pessimistic forecast predicts as many as 1.2 million potential job losses, Bloomberg Economics estimates that only around 535,000 jobs could be cut by year-end. However, as the agency’s experts point out, the full scope of layoffs won’t be reflected in employment data right away, as it will take some time for the numbers to be processed.