DOGE's fast-moving actions may raise economic risks, but likely won't cause a recession.

From Investing.com: 2025-03-08 03:37:00

The Department of Government Efficiency (DOGE) is not likely to cause a US recession, but its fast-moving actions raise economic risks. Concerns about lower growth and higher inflation contribute to the unease. DOGE’s threat to essential government services is real, but its impact on the overall economy is limited. The current US labor force is around 170 million, with nearly 200,000 more unemployed workers needed to raise the rate by 0.1%. DOGE’s approach of moving quickly increases uncertainty and risks, but it is not expected to trigger a recession.

DOGE’s efforts to reduce federal employment include a hiring freeze, deferred resignation program, firing probationary workers, and reduction in force plan. About 100,000 workers have been affected so far, with more layoffs expected. The canceling of federal contracts and grants also puts employment at risk in the private and nonprofit sectors. DOGE’s approach of “move fast and break things” creates economic uncertainty and could impact growth and employment. While DOGE is unlikely to cause a recession, it adds to existing policy uncertainties and could restrain employment growth this year.



Read more at Investing.com: Could DOGE Cause a US Recession?