The March jobs report showed a decrease in government employment, with federal workforce reductions continuing through March.
Kory Kantenga, LinkedIn head of economics Americas, joins Wealth host Julie Hyman to discuss how layoffs are up significantly in the federal sector, emphasizing the potential impact of tariffs on industries like construction and manufacturing.
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Zeroing in on the government part of the employment report in particular, um, it looks like we're starting to see some decreases in government employment. I believe there's a 4,000 uh, job decrease in last month's report, but when should we start to see some of the additional cuts play through there?
Well, based on this week's job openings and labor turnover survey, we should start to see, uh, the reduction in the federal workforce start to show up in the next few reports. So according to this week's Jolts report, we had about a fivefold increase in layoffs from the federal government. We saw that the federal government reduced from January to February about by 10,000 workers, reduction from February to March about 4,000 workers, and we expect that to continue to go on as this works its way through the jobs reports.
Um, and what about the tariff effect, right? Obviously, there's a lot we still don't know about how they're all going to be implemented, how long they're going to be in effect, but I am curious within future jobs reports where exactly we should be paying attention.
So there are some key sectors that are more going to be more exposed to tariffs. We think about construction. Construction, we import a lot of wood in order to build our housing for residential construction. So that's going to be a key area to look at. If it's the case that our wood, since a lot of it comes from Canada, is getting more expensive, do we start to see any slowdown in construction and construction hiring? Right now, even on LinkedIn for March, we don't see that. We see that hiring is up about 13% compared to prior to the pandemic in construction. But that's, I think that's going to be a key area. And then, of course, manufacturing. Those industries are going to be protected by tariffs, but then they're also going to be subject to retaliatory tariffs. So it's very unclear where that will net out and we'll have to see what evolves with manufacturing, which has not been adding a lot of jobs the last few months.
Can you tell us anything about, um, sort of the vibe read you're getting from from folks who are posting on LinkedIn, right? Are we seeing, um, the trepidation that we're seeing in the markets, um, translate to what people are talking about?
We definitely see more folks posting about layoffs on LinkedIn the last few months. That's increased about 35% since January, but it's also important to keep in mind that it's down 25% in March compared to March of last year. So some of that might just be a bit of a seasonal effect. So we're seeing much more chatter about layoffs. And we are seeing, when we ask our members how they feel about the labor market, they don't feel good. They don't feel good at all. Confidence is at an all-time low in terms of folks being able to progress in their career and keep and hold their job. So workers do not feel good about the labor market right now.
Thanks, Cory. Appreciate it.
Thank you.
