How states are scooping up federal workers

0:01NPR.

0:11This is The Indicator for Planet Money. I'm Adrienne Ma. I'm Waylon Wong. And I'm Darian Woods. What a week, guys. I'm exhausted. Now, we have to at least acknowledge the end of the global trading order as we once knew it. Whew, RIP. Skull emoji. We are, of course, talking about the huge announcement from the Trump administration this week, a cornucopia of new tariffs, which we are going to dig into a lot more next week. But for now, we have another important set of numbers out today that gives us a snapshot of how the American worker is doing. You all know this hallowed ritual. We call it Jobs Friday.

0:52That's right. Today, the Bureau of Labor Statistics released its monthly jobs report. It shows the unemployment rate in March edged up to 4.2 percent and the economy added 228 ,000 jobs. On the surface, this is a strong jobs number. But after the break, we'll dig into why the good times may not last. I'll dive into who's actually seeing an opportunity with all the federal job cuts. And I'll look at why part-time workers might be signaling broader economic trouble ahead.

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2:47Just a few clicks can tailor your tone and writing so you come across exactly as you intend. Get time back to focus on your high-impact work. Download Grammarly for free at grammarly.com slash podcast. That's grammarly.com slash podcast. Starting off our look at this month's jobs report, I got to say again that the 228 ,000 jobs added in March is far stronger than was predicted. So a strong month for hiring. Part of what's going on here is that the harsh winter weather that we saw in January and February, it eased up last month. So more people were able to get back on the job. Also, nurses and grocery store workers who had been on strike went back to work.

3:29I didn't realize we had a grocery strike. That's right. We had about 10 ,000 workers at a chain called King Soopers. Several thousand nurses went back on the job. So that was helping burnish the job numbers. On the other hand, the BLS also said that hiring in January and February was about 50 ,000 less jobs than they had initially estimated. So that does take some of the shine off March's hiring spree. You always have to watch those revisions. That's right. And frankly, the jobs numbers we see next month could take a hit because businesses are going to be reckoning with Trump's new round of across-the-board tariffs.

4:09So U.S. companies that import parts or products from other countries are going to be hit with this new cost. And as they figure out how it's going to affect their business, they might be hesitant to hire. So, Darian, what about you? What's jumping out to you for this month's jobs report? So this is the hotly anticipated jobs report where everyone's anticipating how those federal worker cuts will really show up. And today I want to home in on those workers who are being scooped up by states and local governments. So our best estimate is that the Trump administration has laid off or bought out at least 125 ,000 federal workers.

4:49And then there's the ripple effects, right? So you have government consulting companies that have also downsized. And the bottom line is we have a lot of education administrators or energy policy experts or public health practitioners out of work. So we are talking about thousands of people out of the job, right? But what's interesting is it doesn't seem like there is a big plunge in the federal jobs numbers out today. Yeah, the number of federal jobs reduced by only 4 ,000. And that's for a couple of reasons. First, there's been all the chaos of judges freezing and then unfreezing a lot of the terminations.

5:22Right. Second, people might have accepted a buyout, but they might still be on the payroll for a few months. It was like a deferred resignation offer. Exactly. So the Jobs Friday surveys that would have been conducted from the middle of March wouldn't have captured everybody who hasn't stopped receiving their checks. Okay, so maybe like a better measure would just be counting all the people who have that new open to work badge on their LinkedIn profiles. I've been one of those people. Uh-huh. Did it work? It did. I got contacted by an NPR recruiter. Okay, testimony. And, you know, states and local governments want those open-to-work former federal employees.

6:06Last week, the governor of Wisconsin announced a webpage specifically for federal workers where they can find jobs in the state of Wisconsin. I work. I work. I work. I work. I work. I work. For the state. For the state of Wisconsin. The webpage is headed, Wisconsin Wants You. Oh, so welcoming. So Wisconsin is making a pretty hard pitch to come here, work here. Yeah, and several other states are also actively hiring federal workers from Hawaii to Pennsylvania. Also at the local level too in places like Kansas City, Missouri and Fulton County, Georgia. So it really seems like the federal government's loss of workers is potentially a gain for cities and states.

6:50Yep. And Waylon, what do you have? My indicator is 4.8 million. This is the number of people who are involuntarily working part-time jobs. The BLS describes this category as part-time for economic reasons. So maybe they wanted a full-time job, but they could only get a part-time one. Or their employer has cut their hours. Exactly. These are all examples of economic reasons that the BLS gives. Other ones are unfavorable business conditions or a seasonal decline in demand for workers. So in March, there were 4.8 million people in this situation. Now, this is a small share of the total number of workers in the U.S.

7:30economy, but an increase in this number is considered a sign of a softening labor market. This March figure is a little lower than February. However, it is higher than a year ago when it was around 4.3 million. Right. And this is one of the many warning lights that could signal danger for the economy because a business that's under strain from, I don't know, an increase in tariffs, hypothetically, a business that's under strain will often cut hours for workers before resorting to layoffs. Yeah. And to give you an idea of the longer trend line here, there was a huge spike in this number of involuntary part-time workers at the start of the pandemic.

8:08It then dropped below pre-pandemic levels, but it's been mostly edging higher since the start of the year. We'll have to keep tracking it to see whether it falls again next month or resumes its climb. OK, so this is definitely an indicator to watch. Yes. And I also wanted to point out that this number of involuntary part-time workers feeds into an unemployment rate called U6. You might remember that the BLS calculates a bunch of unemployment rates besides the headline one. U6 includes these involuntary part-time workers plus some other categories. And the U6 rate is also higher than a year ago.

8:43Not a good sign. Never.

8:48By the way, on Monday, we're going to dig into the Trump administration's sweeping tariffs. We'll do that by checking in with some business owners that have been on the show before and see how they are feeling the news. This episode was produced by Julia Ritchie with engineering by Robert Rodriguez and Sina Lafredo. It was fact-checked by Sarah Juarez. Kiki Cannon is the show's editor and The Indicator is a production of NPR.