Is a major unemployment wave imminent?

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  • #123401 Reply
    USER

      It seems like we are heading towards a trickle effect on unemployment.
      1. Federal workers are getting offered to leave the government and that won’t set in effect until September. Some will exit early because they won’t sign a loyalty oath.

      I am seeing quite a bit of people switching to “Open To Work” on LinkedIn.

      2. Federal contractors are being laid off now cause of the cuts.

      3. Schools (research) and non-profits are going to have to cut due to thr loss of aid and grants.

      4. Corporate layoffs are picking up because of investments in AI and loss of government contracts. Remember, the companies we invest in make a lot of money off the government.

      That will shrink as the governmet is slowing down procurements.

      5. I assume the supporting business like the restaurant, services, etc will start taking a hit.

      6. People have been buying houses at inflated prices for a while now

      It seems like if one spouse loses a job, we are going to see a large amout of peoples defaulting on loans

      Are others seeing these indicators?

      I personally know more people laid off now and havent seen this since 2008.

      I was going to start slowing down investing and start selling to hold for a dip which I expect to in September. (Federal workers paid until then, fiscal year ends, new school year starts with less funding)

      Also, I have a large investment in a 401k growth fund. Is there any penalty or fees if I move to a very conservative fund?

      #123402 Reply
      Susie

        All the people who take the 9/2025 buyout are already looking for a new job. They took the buy out to either not work until their coming retirement date this year or they plan on getting another job and getting double paid.

        They aren’t sitting on their hands waiting to be unemployed in September….

        The people I know who have taken it (I’m in the fed sector) are thrilled, they keep calling it a golden ticket.

        #123403 Reply
        Andrea

          The finding freezes and the attempt to force workers out of government are illegal and if we are still a functioning democracy will be stopped.

          It’s not inevitable that Musk and the tech bros will succeed in eviscerating our government.

          So, no, none of that’s inevitable yet

          #123404 Reply
          Donna

            The federal workers except for the ones who protect our safety are spoiled. They make too much money and get many benefits from the tax money of people who works for the private sector who pays expensive healthcare insurance and from some who even have no benefits.

            Some teachers don’t get paid that much some get paid too much. They also have student loans that get forgiven.

            If you ask me if there is any special difference between a nurse who works for the public hospital compared to a nurse who works for a private hospital, I can say nothing. One just so happened to land a job in the public one.

            Both work as hard, educated equally, changing lives the same way so how come they don’t get treated and get paid the same?

            So yeah, I think lots of things can be reduced they just got used to it and now once taken away they do fear mongering.

            Don’t tell me you deserve it just because you work for federal or serving the community, the difference you make is no way more than someone who works for a private entity.

            The private companies serve the public as well and maybe more than you do because the private sector caters to all!

            #123405 Reply
            Matt

              I can only hope more uneducated investors or wanna be investors think the sky is falling and that they can actually time the market.

              And please, sell, sell, sell so I can continue to buy as I always will.

              Not being greedy but a welcome a MAJOR pull back so once it rebounds and it will I can stroll into early retirement.

              Crash it baby!

              #123406 Reply
              Dena

                No way to know what the market will do. I’m not planning on changes. But, there is no penalty to change funds within your 401K.

                #123407 Reply
                Kit

                  Feds are already being laid off based on their probation status and where they work. Expecting that to continue and increase regardless of the September timing (which is also being litigated).

                  Agree with your assessment of contracting that supports government services also tightening up, as well as instability/lack of funding for nonprofits and certain research areas.

                  Not sure that I see people defaulting on loans yet, but could see people moving around for new jobs, which will impact housing demands.

                  #123408 Reply
                  Brenda

                    The theory with the stock market is that anything that is public knowledge is already priced in.

                    All those things are public knowledge, so they shouldn’t move the market in September at all.

                    If anything, the impact would be as the judge decides the legality.

                    #123409 Reply
                    Dave

                      Definitley unemployment will rise. But I don’t know if that will mean all stocks will decline.

                      From what I’ve been reading AI is going to be the biggest factor to people losing their jobs, I was reading a news article regarding telecoms companies reducing workforce and using AI to take their jobs, yes this will increase unemployment rates but also should increase profitability for the telecoms company.

                      I think AI will be used in a lot of different industries so it’s hard to say what will happen to the market

                      #123410 Reply
                      Av

                        The first dominoes in a vast network are falling.
                        Millions of federal employees will be sacked.

                        Federal contracts will end meaning several million other private sector / non profit jobs will terminate.

                        One in every 10 American jobs is in the non profit sector. Many in health care, child care, lobbying, civil rights, legal, housing, etc will be jobless.

                        Plus, AI is leading to cuts. That trend will only deepen one year in and further two or three years from now.

                        That said, how exactly can one hedge against the wholesale destruction of the administrative state and AI deleting swathes of jobs?

                        #123411 Reply
                        Laura

                          I’m not here to predict overall market but will say that the govt buyout isn’t going to move the needle.

                          There’s an income cap on the offer that is less than most workers make so there’s no benefit to taking it for most.

                          Also, government employees make less than private sector but have a decent pension so they’re not willing to leave early for a little cash… they’re in it for the pension.

                          Most people who are thinking of taking the buyout are probably close to retirement already.

                          And they have no authority to offer the buyouts so there’s that too.
                          Now, can they forcefully eliminate positions, choose not to backfill, etc. and muck stuff up?

                          Yes. But the buyout is more hype than anything.

                          #123412 Reply
                          David

                            Agriculture is also getting gutted. There were lots of subsidies and grants that were part of the Inflation Reduction Act that farmers now don’t get.

                            There are a lot of accounts on social media of life-long farmers about to lose everything because of the government freeze.

                            Unemployment up and food prices up. It’s going to be tough times for everyone.

                            AND, it’s completely self inflicted…

                            #123413 Reply
                            Mandi

                              We’ve been top heavy for far too long. Our government spending has gotten completely out of control and for WAY too long.

                              There isn’t accountability and there seems a lack of consideration to the average taxpayer. Taxes take away money directly and we physically see the dollars leaving. Inflation robs us similarly.

                              Reading comments on X I don’t think many people correlate that government overspending (borrowing like we have to the tune of $36T) creates inflation. Inflation weakens our spending power.

                              Once sugar is $4 a bag it’s never going back down to $2. While I can empathize with people being laid off, I believe this is very much needed.

                              Our government has gotten too big, and created jobs for jobs sake. 400+ different departments Yikes!

                              Sorry you’re getting worked up. There is no crystal ball though. When to time the market doesn’t exist.

                              What September will or will not bring I just wouldn’t stress over.

                              Try not to at least. The best anyone can do is eliminate debt and learn to live below their means.

                              #123414 Reply
                              Robert

                                Only an idiot can time the market…… And many idiots do that. Even overlooking the questions about the legality of the buyout offer (that a judge has just paused by the way) not enough federal workers are gonna take it for there to really be a significant uptick in the national unemployment rate; and “ mass layoffs” in the federal sector or nothing more than a pipe dream.

                                (there is even a Supreme Court case from the 80s that states that a public sector job, after a person has achieved a certain level of tenure, is in fact, property right; and the person cannot be deprived of that job absent due process of law).

                                Now, if there is wholesale shuttering of cabinet departments …But again, I see that as more of a pipedream than anything else.

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