Be Careful What You Read About DOGE & Non-Farm Payrolls In February

Via SouthBayResearch.com,

The following is making the rounds, and it is technically true but factually false.

“In a typical February, state and local government hiring tends to drive national job growth, but we think we could see a sharp pull back in state and local government hiring this February due to uncertainty over federal funding following Trump’s guidance, Bloomberg notes.”

Start with this 1st part: 

“government hiring tends to drive national job growth”

Government hiring does NOT drive February hiring

School ‘hiring’ drives February hiring.  

And since most schools are public, it shows up in Gov’t payrolls. 

But even calling it ‘hiring’ is a misnomer.  

This is back-to-school restoration of temporarily released school staff.  

These are the folks who drive buses, work in the cafeterias, maintain the grounds, provide after-school activities, etc etc.

Otherwise Gov’t hiring is actually almost non-existent in February, except for Post Office hiring.

So technically it is true – Gov’ts drive February hiring because they include education payrolls – but linking them to DOGE misrepresents the situation. 

(Note: cuts to Dept of Education will have an impact, but they haven’t really started yet.)

Now for the 2nd part: 

“we think we could see a sharp pull back in state and local government hiring this February due to uncertainty over federal funding following Trump’s guidance”

So…you are guessing?

DOGE has zero impact on the back-to-school hiring.  

Nada.

DOGE does have a near-term impact on Private Sector hiring.  

For example, eliminating $1B in contracts to vendors for the purpose of promoting DEI in classrooms: that’s a job killer.  But these began AFTER the NFP survey kicked in.

And that timing factor comes into play with all of the cost-cutting by Trump.

“Uncertainty over federal funding” was non-existent on January 20th when Trump was inaugurated.  Nobody took his bluster seriously.  It became a reality as February progressed, but that also means the impact would fall outside of the February payroll survey period.

I don’t disagree with the assessment that a big wave is coming.

I do disagree that it starts in February.