One aspect of the firing of all the federal workers that has not been raised so far (at least I have seen no mention of it) is the impact the firings will have on employment levels. There could be a non-trivial increase in unemployment as a result.
A boost to the unemployment level could lead to slower increases or reductions in wage grow…
One aspect of the firing of all the federal workers that has not been raised so far (at least I have seen no mention of it) is the impact the firings will have on employment levels. There could be a non-trivial increase in unemployment as a result.
A boost to the unemployment level could lead to slower increases or reductions in wage growth levels, which is something the fed is actually interested in seeing. Under the circumstances though with many or Trump's economic and immigration policies likely leading to higher inflation the fed may be forced to increase interest rates at time when unemployment is expanding, not something that promote expanding economic growth.
An ancillary extension to the layoffs is the impact they could have on states' workmens compensation funds. In states with large populations of workers paid with federal funds there may be serious strains on the compensation funds. Virginia certainly comes to mind. And they have a gubernatorial election in the fall.
One aspect of the firing of all the federal workers that has not been raised so far (at least I have seen no mention of it) is the impact the firings will have on employment levels. There could be a non-trivial increase in unemployment as a result.
A boost to the unemployment level could lead to slower increases or reductions in wage growth levels, which is something the fed is actually interested in seeing. Under the circumstances though with many or Trump's economic and immigration policies likely leading to higher inflation the fed may be forced to increase interest rates at time when unemployment is expanding, not something that promote expanding economic growth.
An ancillary extension to the layoffs is the impact they could have on states' workmens compensation funds. In states with large populations of workers paid with federal funds there may be serious strains on the compensation funds. Virginia certainly comes to mind. And they have a gubernatorial election in the fall.