DOGE layoffs could trigger wider unemployment, slow economy: Apollo

This story was originally published on CFO Dive . To receive daily news and insights, subscribe to our free daily CFO Dive newsletter .

Dive Brief:

Dive Insight:

T he economy last year belied predictions of a downturn and grew 2.5%, fueled in large part by unexpected strength in consumer spending.

The job market, after softening in the summer, firmed up by September, prompting the Federal Reserve to cut the benchmark interest rate by a full percentage point by the end of the year.

Many economists expect just a slight slowing in growth this year.

The Conference Board expects gross domestic product to increase 2.3% in 2025 , while Goldman Sachs forecasts 2.5% growth this year.

During the first quarter of 2025, GDP will probably expand at a 2.3% annual rate , the Atlanta Fed said on Wednesday.

“ The overall picture is that the U.S. economy remains on a firm footing, with output growing at a solid pace,” Fed Governor Adriana Kugler said in a speech Thursday.

The election of Donald Trump for his second presidential term in November sparked investor and C-suite optimism.

The Standard & Poor’s 500 Index hit a record on Wednesday and CEOs surveyed by the Conference Board from Jan. 27 until Feb. 10 voiced the brightest outlook in three years.

The s hare of chief executives during the current quarter planning to boost capital spending in the next 12 months rose 8 percentage points to 33%, the Conference Board said, reporting on a survey co-conducted with the Business Council from Jan. 27 to Feb. 10.

Yet signs of weakness have recently emerged, with the murky outlook for U.S. tariff and other policies eroding sentiment among consumers and purchasing managers.

“Economic policy uncertainty is spiking higher,” Sl ø k said, noting that “near-term downside risks to the economy and markets are growing.”

“The question is if persistently elevated policy uncertainty will begin to have a negative impact on capex spending and hiring decisions,” he said.

The Fed last month held the main interest rate at a range between 4.25% and 4.75%, noting a lack of clarity in federal regulation, trade, immigration and taxation under the Trump administration.