The U.S. government’s employee headcount had reached a new non-census-year post-World War II record in January. But that has since changed since the Trump administration, with the aid of Elon Musk, has begun its effort to reduce the federal workforce by 10%, or about 242,000 jobs.
These proposed job cuts are slightly less than the 252,000 jobs added each month on average over the past three years.
The bond market’s response to the strong labor market may be tempered by the expected impact of these spending cuts. But bond traders are concerned that the resilient jobs market could reignite inflation.
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