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Home»ECONOMY»Private Sector Hiring Rising, Govt. Employment Falling Under Trump

Private Sector Hiring Rising, Govt. Employment Falling Under Trump

By Frank BJune 14, 2025Updated:June 18, 2025 ECONOMY
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Shortly after arriving in Washington, Treasury Secretary Scott Bessent emphasized the importance of “reprivatizing the economy.” The billionaire hedge fund manager stepped out from behind the desk to actively implement President Donald Trump’s agenda of cutting government spending and boosting private-sector growth. While Trump’s final term is still underway, early signs indicate that this objective is beginning to take shape.

Under the Biden regime, government payrolls made up a significant portion of overall job growth, especially during the latter half of former President Joe Biden’s term. However, in the early months of the new administration, that trend is reversing—and could gain momentum heading into 2026. Between January and May, private sector payrolls surged by nearly 600,000. In contrast, government employment has remained flat, with the federal workforce shrinking by 59,000.

That figure may grow in the coming months. Economists are closely watching the Department of Labor’s weekly initial jobless claims report, which offers insight into the number of federal employees filing for unemployment benefits.

The number of federal employees filing for unemployment has been rising steadily this year, reaching 561 for the week ending May 31—up from 400 during the same period last year. However, experts caution that the actual number of displaced workers could be significantly higher, as many may have received one-year severance packages, delaying their need to file for benefits. As a result, a more noticeable increase in claims may not materialize for several more months.

Regardless, the expansion of government payrolls seen in recent years appears to be slowing. While the resulting savings may be modest, they come at a time when the federal government is running a $2 trillion annual deficit—making even incremental reductions meaningful. More broadly, the trend suggests that the U.S. economy is shifting back toward private-sector-driven growth.

Data from the Bureau of Economic Analysis supports this shift: government spending declined by 0.7% in the first quarter. Within that category, federal consumption expenditures and gross investment dropped by 4.6%, including a 7.1% decrease in national defense spending and a 1.1% reduction in nondefense expenditures.

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