It “seems almost unavoidable at this point” that the United States is “headed for a deep, deep recession” thanks to the Trump administration’s massive government job cuts and pullback from official contracts, a former Obama-era Department of Labor economist has warned.
Jesse Rothstein, a professor of public policy and economics at the University of California, Berkeley, predicted on BlueSky this week that the employment report for March 2025 will show “bigger job losses than any month ever outside of a few in 2008-9 and 2020.” (I.e. — when America was hit by the 2008 financial crash and then, later, by the coronavirus pandemic).
Rothstein also envisioned “enormous private market uncertainty” that would make companies reluctant to hire.
It’s “going to be very, very bad,” he said he feared.
President Donald Trump has tasked billionaire Elon Musk, the world’s richest man, with slashing public spending via the non-official Department of Government Efficiency.
The current total number of federal jobs cut is unclear.
But Rothstein estimated it to be more than 200,000.
The gutting of government is just one Trump policy that economists have warned could plunge America into a new financial crisis.
Others include Trump’s imposition of tariffs on imports and his vow to deport millions of undocumented immigrants.
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Nobel laureate economist Joseph Stiglitz earlier this week said the tariffs could cause stagflation — or stagnant economic growth, high inflation and rising unemployment. He added that the U.S. is becoming “a scary place to invest” amid the ripping up of government contracts.
