The US economy is currently feeling intense pressure, weighed down by ballooning metrics and indexes indicating its rapid decline. For instance, the US debt metrics have hit $37 trillion recently, derailing the US economy and its planned trajectory. In addition to this, the rising rapid inflation coupled with the US dollar’s constant erosion is also adding more pressure to the US economy. In its wake, a new development has taken control of the market where the federal workforce seems to have been shrinking, alarming the US economy of a potential economic change. Should you be worried? Let’s find out.
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Staggering Stats Indicate US Federal Workforce Is Shrinking
Per the latest post uploaded by the Kobeissi Letter, the US federal workforce is encountering a serious toll, as its workforce seems to be shrinking with each passing day. The portal stated how government jobs are falling at a rapid pace, with many states reporting a staggering loss of 22,000 jobs in the last four years.
“Government jobs are falling: 22,000 federal government jobs were lost in May, the most in at least 4 years. This marks the 4th consecutive monthly decline.”
The platform further added the year-to-date data, adding how federal government jobs have declined by 59,000 to 2.6 million. This number is the lowest since November 2024, sending alarming signals for the US economy as a whole. In addition to this, nearly 260,000 workers have been fired, indicative of a potential workforce change in the seasoned federal infrastructure.
“Year-to-date, federal government jobs have declined by 59,000, to 2.96 million, the lowest since November 2024. By comparison, the 2015-2019 average was ~2.80 million. According to Reuters estimates, over 260,000 federal workers have been fired, taken buyouts, or retired early this year. The federal workforce is shrinking.”
Government jobs are falling:22,000 federal government jobs were lost in May, the most in at least 4 years.This marks the 4th consecutive monthly decline.Year-to-date, federal government jobs have declined by 59,000, to 2.96 million, the lowest since November 2024.By… pic.twitter.com/icQHx7zpvx
— The Kobeissi Letter (@KobeissiLetter) June 20, 2025
A Worrying Signal Indeed
The shrinking of the federal job market, either through rising unemployment, economic uncertainty, or deficit mongering, is alarming for the US economy. Per a real-time marketing insight portal, Alva, tight budgets, aging staff, and tech-driven outsourcing are primary reasons that are leading the change in the seasoned federal job workforce.
“Tight budgets, aging staff, and tech-driven outsourcing are the core reasons behind the shrinking federal workforce. Agencies face hiring freezes and wave after wave of retirements but aren’t refilling seats fast enough. If this continues, expect slower services, heavier contractor reliance, and a real risk of lost institutional knowledge—undermining the government’s ability to act fast in a crisis.”
Tight budgets, aging staff, and tech-driven outsourcing are the core reasons behind the shrinking federal workforce. Agencies face hiring freezes and wave after wave of retirements, but aren’t refilling seats fast enough. If this continues, expect slower services, heavier…
— Alva (@AlvaApp) June 20, 2025
In addition to this, rapid policy shifts are also taking a toll on this number.
“Different administrations emphasize either expanding or shrinking the government. Recent policy preferences in some periods have emphasized reducing the size of the federal workforce. Sometimes through executive actions, proposed reorganizations, or redirected priorities within agencies.”
Furthermore, a reduced federal workforce can have a lasting negative influence on the US economy. For instance, reduced federal jobs could signal rising economic stress, leading the US economy to make budgetary changes by slashing such jobs. Moreover, this development could manifest in the form of weaker public services, which again can be hazardous for the overall US economic structure. Fewer federal jobs would also indicate less tax revenue entering the US, which again could derail the nation’s economic balance.
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