On "Forbes Newsroom," Allison Shrivastava, Associate Economist with the Indeed Hiring Lab, discussed the impact of DOGE cuts on the workforce, where the U.S. job market currently stands, and where there is actual growth in the labor market that now-unemployed former federal workers might turn.
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NewsTranscript
00:00Hi everyone, I'm Maggie McGrath, Senior Editor at Forbes.
00:07Over the past month, tens of thousands of federal employees have lost their jobs due
00:12to cuts from the Department of Government Efficiency.
00:15What does this mean for the broader job market, and how can these workers find new jobs?
00:20Joining us to answer these questions is Alison Srivastav.
00:24She's an economist with Indeed's Hiring Lab.
00:27Alison, thanks so much for being here.
00:29Thank you for having me.
00:30So just from your perspective as an economist, can we zoom out and just look at the number
00:34of jobs lost?
00:35I know it's an ever-evolving picture, but what is your qualitative assessment of what
00:41we've seen over the past four to eight weeks?
00:45So there's a couple of ways to look at this.
00:46You know, there's the direct jobs that have been lost, and there's also the effect of
00:51uncertainty on the job market in the form of, you know, are contracts going to be cut
00:57back?
00:58What does this mean for the broader economy?
01:00So there's a little bit of a ripple effect there as well.
01:03And you know, it kind of has made us a little bit frozen in the labor market, if it will.
01:08When you're getting mixed information, you're not sure what direction things are going.
01:14It kind of causes everybody to freeze up.
01:16And you know, freezing in a labor market is a form of stability, but can't stay frozen
01:21for too long.
01:24Can't stay frozen for too long.
01:25And one of the things I'm wondering about is, does that uncertainty create a recession?
01:30Are we at risk for these doge cuts to cause a recession because of not just the jobs that
01:36are being cut, but because of all the employers who might be just holding on to cash reserves
01:41and not hiring?
01:43I would be pretty reticent to say that doge cuts alone would be the cause of a recession.
01:49I think that there is a lot of other uncertainty added to the market, and we'll see what happens.
01:55Do you have any predictions?
01:57It's the end of March, so the next jobs report is coming out at the end of next week.
02:02What are you expecting from that report?
02:06So the next jobs report we will have will actually start to capture more of these layoffs
02:12as well.
02:13You know, there's a little bit of a lag there, and so not all the layoffs have really been
02:17properly captured.
02:19I would expect that, you know, there might be a little bit of an erosion.
02:24I don't expect there to be necessarily a big drop-off, but like I said, if you stay
02:29frozen for long enough, you might get frostbite, and I expect that we might see some of that
02:35in the next report, but we'll find out.
02:39We also saw private sectors with layoffs.
02:42I'm going to restart that question.
02:45In January, we saw companies in the private sector laying off employees.
02:50I think it was part of that belt tightening due to political and economic instability,
02:54but if you had to categorize 2025 so far across both the public and private sectors in terms
03:01of job opportunities and job loss, how would you describe it?
03:07So layoffs are still relatively low right now by historical context.
03:12Quit rates as well are really low.
03:14So what that means is that people are both hesitant to lose their workers, which makes
03:19sense.
03:20We just came off of 2022 when there was a lot of competition for hiring, and I bet there's
03:25a little bit of a scarring effect there from business owners being concerned whether or
03:30not they can find the employees that they need.
03:34But that quits rate being low as well shows you that people aren't confident anymore that
03:40they can find another job if they were to leave their own.
03:43You know, it could also be that there were better matches made when the quits rate was
03:48really high.
03:49But I think that, you know, there are jobs being added to the economy, but they're being
03:55added in a pretty small subset of sectors.
03:58They're really being carried by health care and things like that.
04:02So while the overall numbers, you know, do look pretty good, how you feel about the economy
04:09right now is probably going to really depend on what sector you're in, what sector you
04:13hire in, what sector you were seeking employment in.
04:16That's where you really get a differentiation.
04:20That's an important point.
04:21And I want to dive into more where we are seeing job growth.
04:24So you mentioned health care.
04:25What types of jobs are being created there and what are the other sectors in addition
04:28to health care where there is some uptick in job creation?
04:31Yeah.
04:32So we at Indeed, we track job posting data and we've seen a few sectors that have had,
04:39you know, quite a bit of stability.
04:41Accounting is one.
04:42There's always been accounting jobs.
04:43They're well above their pre-pandemic baseline.
04:46Some service sectors are still performing pretty well, legal sectors performing well,
04:51and health care is a very strong sector.
04:55And I think, you know, with an aging population will be time to come.
04:59But there's other sectors like software development, banking, finance, you know, knowledge work
05:06sectors that are pretty unsteady on their feet right now.
05:11Steady on their feet, meaning it's hard to get a job and people they both aren't hiring
05:16and people aren't leaving those those sectors.
05:19It's a very competitive hiring market for those sectors because there's more people
05:23competing for a smaller number of jobs, you know, which a lot of the federal workers are
05:30from industries that would be similar to knowledge work.
05:33You know, a lot of them are really specialized workers, so they'll be entering a job market
05:37that is already pretty tight for their sectors.
05:42I am sure that is concerning news for anyone watching who has lost their job.
05:46But what would you recommend to a federal worker who had a job up until a few weeks
05:51ago and is now on the job market?
05:53Is there a way they should be positioning their resume or their interviews in order
05:58to optimize on the opportunities that do exist?
06:02Yeah, so I I've come from the government sector prior to coming to the private sector as well,
06:08and it is different.
06:09You have to tailor your resume differently.
06:12It's a completely different language as well.
06:14So I would definitely recommend reviewing your resume and adapting it for a private
06:20job market.
06:22And keep in mind, too, you know, it takes about 15 weeks for the average job search.
06:28It could take longer if you are looking in sectors that are pretty tight right now, which
06:33a lot of federal workers will be.
06:36So I would set a budget, review your assets and expenses as soon as you can.
06:43And one piece of advice that I know gets hammered home a lot, but it's because it's important.
06:48Leveraging your network is such a powerful tool.
06:51People want to hire people.
06:53And the more you can let people know that you are looking what you have to offer, that
06:58networking really goes a long way.
07:01So network, review your resume.
07:05Is there anything else you would tell federal workers right now who are kind of maybe perhaps
07:10just trying to get on their feet and don't know where to start?
07:16You know, one good thing is that a lot of employers have been moving away in job postings
07:23from requiring stricter educational requirements and instead acquiring skills.
07:28So that's promising if you're wanting to, say, reskill yourself and enter in a different sector.
07:34So say you have been doing policy analysis and you'd like to look into something like accounting.
07:42I would definitely take stock of what is where jobs are, what's important to you in terms
07:48of having a job and see if you can kind of pivot your existing skills to fit what the
07:56market's demanding.
07:59Now when you talk about what the market's demanding, I had a question from someone about
08:03whether jobs with a great deal of specific skills versus general skills are more popular
08:10right now.
08:11Are people looking, are employers looking for a jack or jill of all trades or are they
08:17looking for someone who has spent the last 15 years doing one thing and perfecting that skill?
08:23Yeah, I'm going to go back to it, but it depends on your sector.
08:28But here's why, you know, if you say you work in software development, for example, you
08:33just came off of a really tight labor market 2022 where, you know, people really competing
08:39for hires.
08:40And so maybe they were much more open with what they wanted to what they wanted to have
08:45on. And now, you know, for those sectors, the ball's really much more in the employer's
08:51court. So if they can have more stringent requirements, more specific requests, I think
09:00that's more of a function of labor market tightness than anything else.
09:06You mentioned re-skilling and we hear about that year after year after year, but I'm
09:10wondering, is 2025 going to be an above normal, above average year in folks completely
09:17switching industries or is that not something we can predict?
09:20It's definitely not something I can predict right now.
09:23You know, there is a lot up in the air in terms of what industries will be, what sectors
09:29will be expanded upon or contracted.
09:31So we'll definitely I'll definitely be keeping a watch on that alongside you.
09:37There are a number of economic signals that I know economists like to look at.
09:41What will you be watching in the coming weeks and months that will perhaps paint a picture
09:45of the rest of 2025 or at least, you know, the next three to six months?
09:51So there are a number of indicators, like you said, and I would encourage anyone looking
09:57at the labor market to really take in all of the indicators that you can.
10:02They're all important.
10:03They all play a role and it's easy to get fixated on just one or two and having that
10:07be an end all for your economic understanding.
10:12I am I've been really interested in the quits rate and layoffs rate for most of 2025 just
10:19because they have both been so low and frozen and kind of waiting to see if things.
10:26What the negative repercussions, if there are any from.
10:31Those two metrics really flatlining for quite a while.
10:36The word unprecedented is often used to describe the current news cycle, but I'm wondering,
10:42Alison, as you look at the economic trends and the job trends that we've seen for 2025
10:47so far, is there a recent year that serves as a good analogy and then perhaps guidance
10:53for folks who are looking for some degree of insight or comfort?
10:59You know, if we really zoom out over the last few years, a lot has happened and a lot of
11:05that has happened for the very first time, we just had a complete pandemic shuddering
11:10overnight of all businesses, and then we had one of the hottest labor markets we've
11:14seen. And now we're we're coming off of that, you know, I know that it seems like it's
11:19been a while ago and in terms of time it has, but that serves to inform kind of where
11:24we are now in a lot of ways, I think.
11:29The hardest part about really feeling comfortable in predicting what might happen
11:36for this year is really.
11:39Uncertainty around where policies coming from, what policies happening, and even with
11:46the layoffs, like how many people will be affected, all that kind of uncertainty really
11:51does start to impact how you feel about the labor market and how you feel about the labor
11:56market impacts the labor market itself.
12:00It's a self-perpetuating cycle.
12:03Yeah, it is. If you if you don't feel confident that you can expand your business, then you
12:09won't hire. If you don't feel confident that you can leave your job and find a new one,
12:13then you won't.
12:15That, you know, chicken or the egg is the is it the economy or sentiment?
12:19But the sentiment does certainly serve to inform the economy.
12:25Absolutely, it's completely intertwined, though it makes me wonder that if some folks were
12:29to just take the leap and hire or or quit and look for a new job, that would kickstart
12:35things. What do you think it would take to juice the job market, so to speak?
12:43I think definitely confidence in certainty.
12:48I know that you've probably heard that word, especially from economists, so much lately
12:53uncertainty, uncertainty, uncertainty.
12:55But it matters, especially if you're wanting an economy to expand.
12:58You have to know that your expansion is going to be worthwhile.
13:05So I definitely think uncertainty is going to be the key word of 2025.
13:13That's good news for folks who like uncertainty and bad news for folks who like
13:19certainty, and I suspect more of us fall in the latter bucket than the former.
13:23But, you know, before I let you go, do you at Indeed have any other predictions or any
13:29other trends that you're watching right now that our Forbes audience should know about?
13:34I think the biggest thing that we will be watching is.
13:37Again, another tagline that I'm going to be saying for the rest of 2025, hopefully not,
13:43but, you know, with things being so frozen and having that that really sideways movement
13:49of a lot of metrics.
13:53You can't stay frozen forever without having some negative side effects, and so we have
13:59a we have a wealth of data available.
14:01We look at, you know, job postings, data, remote jobs, and those are things that I think
14:06really serve for timely metrics, which is important in today's economy, right?
14:10Yet that you don't want any kind of lack of time in using, you know, understanding what's
14:17going on. So I think timely metrics are going to be the most important thing moving forward
14:23for a while.
14:25Alison, Shrivastav, thank you so much for joining us and breaking down all of the
14:29Thank you so much for joining us and breaking down what we know about the labor market right now.
14:33We will hope to talk to you in a few weeks or months when things are a little less frozen.
14:38But for the time being, thank you so much for your insight.
14:41Thank you for having me.