I doubt we’ll see a depression unless Trump increases tariffs again in response like Hoover did.
Hoover wasn’t ripping through the federal government, slashsing employee headcounts, and slashing outgoing funds.
These two alone, are likely enough to seal the “Depression” deal… Like, in 1 month, we have 30,000+ new people seeking unemployment; states, counties, and cities are going to start cutting jobs too, because of the slashed federal funds which fund programs at those levels. I know one non-profit that has basically let all 90 employees go, because lack of federal funds coming in on grants means they can’t keep the rent paid.
30k people looking for jobs isn’t going to trigger anything. A typical jobs report shows adding something like 100-150k jobs in one month, so a one time bump in workers seeking employment is merely a blip. Here’s the January report, which shows 143k jobs added.
Yes, a lot of companies and individuals will be impacted, but I highly doubt it’s widespread enough to be more than a blip on the market. The bigger impact will be a longer term impact from what these employees used to do, and what will fill their place, but I doubt it’s recessionary.
I’m much more worried about tariffs chilling consumer sentiment and reducing demand, since that’s what actually triggers recessions.
30k is a low end estimate. And 30k+ people in a single month WILL be more than a dent. So, take the 100-150, and revise back to 70-120K new jobs, which is below typical new job creation.
And this is JUST the first wave of effects… Those jobs created other jobs, down the line, which also are going away. Case in point: The 90 people in a single NPO that let everyone go. That is not unique, and not counted in the federal layoff count.
Just looked it up, the current count is 77,000 employees have been terminated, so far. So, that 100-150k gets revised downward to 30-70K new jobs… Almost cut it in half there! Its expected to increase, upwards of 200K. And, those all, once again, have downward effects on local govs and NPOS.
It’s unlikely to increase monthly, and it’ll likely plateau after a couple months after Trump has his fun. Since the economy is reasonably healthy (lowish unemployment, inflation under control, etc), the jobs report isn’t going be all that pivotal unless inflation picks back up again or consumer spending drops, and then it’s only interesting as a trend.
It turns out, when you flood the market with competent workers and your economy is otherwise healthy, they tend to get snapped up. The same is true for any resource, if something useful all of a sudden gets more plentiful, it will be used.
I’m not saying this won’t have an impact, I’m saying the jobs report isn’t where to look for problems since it’s usually a lagging indicator of larger problems. Recessions aren’t caused by governments cutting jobs, unless it’s a socialist country or something where the government is the main employer or something.
I’m far more worried about tariffs in the short term than I am about government jobs getting slashed. That’s concerning over the long term as research doesn’t get done and whatnot, but that’s a future us problem.
Since the economy is reasonably healthy (lowish unemployment, inflation under control, etc)
OMG… The economy ISN’T reasonably healthy…
Inflation is headed back up.
Houselessness in the US hit records highs, and still climbing.
Real income is still flat from 1980.
It turns out, when you flood the market with competent workers and your economy is otherwise healthy, they tend to get snapped up.
That… Not at all how it works. It ignores all sorts of things, like labor mobility. Remember the Great Depression? Loads of people, and loads of jobs out there… Labor was frozen, and immobile.
Right now, we have low unemployment, because people are holding 2 and 3 jobs just to meet basic needs… And are still falling behind.
Source? Jan inflation was 3.0% annualized, slightly up from 2.9% in December. We hit a low of 2.4% back in Sep, but it’s been pretty steady around 2.5-3% over the past year. The fed started cutting rates late last year, and now they’re pausing. There’s always some uncertainty around election season, and this one was especially spicy, so that’s honestly a good call.
Houselessness in the US hit records highs, and still climbing.
Yes, that’s certainly concerning. But that doesn’t really indicate issues in the broader economy, it indicates issues in the low-end of housing affordability. That’s certainly a problem and should be addressed, but it’s not indicative IMO of a recession looming, unless we get a round of defaults or something like we had in 2007/2008.
Prices are high because new construction was severely limited during COVID, and it does seem to be getting better, just slower than most would like.
people hoarding dollars due to #1, dramatically reducing money circulation (i.e. demand falls off)
tariffs, which caused things to get even more expensive, fueling #2
If Hoover just didn’t create tariffs to try to address the recession, the Great Depression likely never would’ve happened. But no, we chased reduced demand with higher prices, further pushing demand down. Instead, we should have increased the money supply, encouraging businesses to expand instead of consumption to contract.
I am concerned about Trump’s tariffs for much the same reason that tariffs were problematic in the 1920s, but we’re not in a deflationary environment, on the flipside, inflation seems to be largely under control. Ideally, if we do tariffs, we should wait until inflation is too low and the fed wants to drop rates, because that means the market is a bit overheated and tariffs could help cool it a bit.
Additionally, slashing federal spending does… Reduce the GDP. Every federal dollar spent usually leads to 3-7 USD once it gets to the streets.
If we go back to the Great Depression, just creating jobs didn’t fix the economy, my understanding is that gold inflows (we were still on the gold standard) largely did, because it increased money supply, encouraging more investment. The rampant deflation started ending in 1933 (same link as above), which is when the economy started showing signs of recovery.
That’s the same general idea for the recovery in the 2008 recession, we slashed fed rates, which increased the money supply and encouraged investment.
Every federal dollar spent usually leads to 3-7 USD once it gets to the streets.
If we go back to the Great Depression, just creating jobs didn’t fix the economy, my understanding is that gold inflows (we were still on the gold standard) largely did, because it increased money supply, encouraging more investment
That’s… not really true, though it is a popular take. After WW2, there were concerns that we’d go right back into recession/depression, because the fundamentals of the economy didn’t really change. The main thing that seemed to fix that was slashing taxes to encourage more private sector investment, which helped take advantage of dominating trade while the rest of the world was rebuilding.
Hoover wasn’t ripping through the federal government, slashsing employee headcounts, and slashing outgoing funds.
These two alone, are likely enough to seal the “Depression” deal… Like, in 1 month, we have 30,000+ new people seeking unemployment; states, counties, and cities are going to start cutting jobs too, because of the slashed federal funds which fund programs at those levels. I know one non-profit that has basically let all 90 employees go, because lack of federal funds coming in on grants means they can’t keep the rent paid.
30k people looking for jobs isn’t going to trigger anything. A typical jobs report shows adding something like 100-150k jobs in one month, so a one time bump in workers seeking employment is merely a blip. Here’s the January report, which shows 143k jobs added.
Yes, a lot of companies and individuals will be impacted, but I highly doubt it’s widespread enough to be more than a blip on the market. The bigger impact will be a longer term impact from what these employees used to do, and what will fill their place, but I doubt it’s recessionary.
I’m much more worried about tariffs chilling consumer sentiment and reducing demand, since that’s what actually triggers recessions.
30k is a low end estimate. And 30k+ people in a single month WILL be more than a dent. So, take the 100-150, and revise back to 70-120K new jobs, which is below typical new job creation.
And this is JUST the first wave of effects… Those jobs created other jobs, down the line, which also are going away. Case in point: The 90 people in a single NPO that let everyone go. That is not unique, and not counted in the federal layoff count.
Just looked it up, the current count is 77,000 employees have been terminated, so far. So, that 100-150k gets revised downward to 30-70K new jobs… Almost cut it in half there! Its expected to increase, upwards of 200K. And, those all, once again, have downward effects on local govs and NPOS.
It’s unlikely to increase monthly, and it’ll likely plateau after a couple months after Trump has his fun. Since the economy is reasonably healthy (lowish unemployment, inflation under control, etc), the jobs report isn’t going be all that pivotal unless inflation picks back up again or consumer spending drops, and then it’s only interesting as a trend.
It turns out, when you flood the market with competent workers and your economy is otherwise healthy, they tend to get snapped up. The same is true for any resource, if something useful all of a sudden gets more plentiful, it will be used.
I’m not saying this won’t have an impact, I’m saying the jobs report isn’t where to look for problems since it’s usually a lagging indicator of larger problems. Recessions aren’t caused by governments cutting jobs, unless it’s a socialist country or something where the government is the main employer or something.
I’m far more worried about tariffs in the short term than I am about government jobs getting slashed. That’s concerning over the long term as research doesn’t get done and whatnot, but that’s a future us problem.
OMG… The economy ISN’T reasonably healthy…
Inflation is headed back up.
Houselessness in the US hit records highs, and still climbing.
Real income is still flat from 1980.
That… Not at all how it works. It ignores all sorts of things, like labor mobility. Remember the Great Depression? Loads of people, and loads of jobs out there… Labor was frozen, and immobile.
Right now, we have low unemployment, because people are holding 2 and 3 jobs just to meet basic needs… And are still falling behind.
https://www.politico.com/news/magazine/2025/02/11/democrats-tricked-strong-economy-00203464
The economy is only doing “reasonably well” for oligarchs.
Additionally, slashing federal spending does… Reduce the GDP. Every federal dollar spent usually leads to 3-7 USD once it gets to the streets.
Source? Jan inflation was 3.0% annualized, slightly up from 2.9% in December. We hit a low of 2.4% back in Sep, but it’s been pretty steady around 2.5-3% over the past year. The fed started cutting rates late last year, and now they’re pausing. There’s always some uncertainty around election season, and this one was especially spicy, so that’s honestly a good call.
Yes, that’s certainly concerning. But that doesn’t really indicate issues in the broader economy, it indicates issues in the low-end of housing affordability. That’s certainly a problem and should be addressed, but it’s not indicative IMO of a recession looming, unless we get a round of defaults or something like we had in 2007/2008.
Prices are high because new construction was severely limited during COVID, and it does seem to be getting better, just slower than most would like.
That’s just not true.
Those were very different times. The Great Depression seems to have been caused by:
If Hoover just didn’t create tariffs to try to address the recession, the Great Depression likely never would’ve happened. But no, we chased reduced demand with higher prices, further pushing demand down. Instead, we should have increased the money supply, encouraging businesses to expand instead of consumption to contract.
I am concerned about Trump’s tariffs for much the same reason that tariffs were problematic in the 1920s, but we’re not in a deflationary environment, on the flipside, inflation seems to be largely under control. Ideally, if we do tariffs, we should wait until inflation is too low and the fed wants to drop rates, because that means the market is a bit overheated and tariffs could help cool it a bit.
If we go back to the Great Depression, just creating jobs didn’t fix the economy, my understanding is that gold inflows (we were still on the gold standard) largely did, because it increased money supply, encouraging more investment. The rampant deflation started ending in 1933 (same link as above), which is when the economy started showing signs of recovery.
That’s the same general idea for the recovery in the 2008 recession, we slashed fed rates, which increased the money supply and encouraged investment.
That really depends on what it’s spent on.
WW2 fixed the Great Depression…
That’s… not really true, though it is a popular take. After WW2, there were concerns that we’d go right back into recession/depression, because the fundamentals of the economy didn’t really change. The main thing that seemed to fix that was slashing taxes to encourage more private sector investment, which helped take advantage of dominating trade while the rest of the world was rebuilding.
Pretty sure all of Europe needing to be rebuilt, and the US having the only working industrial sector had a huge thing to with it…
Not slashing taxes… taxes were at their highest in the 60s.