Yes, Trump has shrunk the government

President Trump’s big jobs boast in his State of the Union address Tuesday was that under his watch every job created in the US has been a private sector one. It is a laudable accomplishment that eases the burden on the taxpayers who shoulder the cost of public sector employment.

“More Americans are working today than at any time in the history of our country. Think about that, any time in the history of our country, more working today and 100 percent of all jobs created under my administration have been in the private sector,” Trump claimed.

If anything, Trump undersold his accomplishment in this area. Employment by the federal government has declined by 327,000 jobs sinch October 2024, a reduction of 10.9 percent. There doesn’t appear to be any precedent for this. For all of the turmoil and controversy that the Department of Government Efficiency stirred up, it did succeed in its main goal.

The fact that Trump didn’t spend more time touting out this accomplishment may also inadvertently illuminate why shrinking the government is so hard. Explaining why getting rid of jobs – even redundant, taxpayer-subsidized ones – is a good thing isn’t easy under the best of conditions. In Trump’s case, eliminating 327,000 federal jobs did significantly cut into his overall job creation numbers, and those numbers have become a sore point for this administration.

Total employment in the US currently sits at just above 163 million, up from 162.3 million when Trump took office in January 2025. That’s a net gain of 743,000 jobs. Trump didn’t mention this in his address possibly because it is a relatively modest number. In his 2018 State of the Union address, one year into his first administration, Trump was able to boast, “Since the election, we have created 2.4 million new jobs.”

The official unemployment rate is now 4.6 percent, up from 4.4 percent when he took office, owing to more people actively looking for work.

Job creation in Trump’s second term has been hurt by his own volatile tariff policies, which inhibit long-term investment. In just the last week, the Supreme Court ruled that Trump’s tariffs were illegal and Trump responded by announcing new 10 percent worldwide tariffs under a different law, then upping those to 15 percent three days later. Businesses are left with no idea what prices they should charge or how much imports are going to cost them over the next year, so they tend to pull back rather than invest and hire more people.

Trump insists that his tariff policies are net gain for the country and scorns data to the contrary. When the Bureau of Labor Statistics (BLS) began reporting a hiring slowdown last year, Trump alleged, without evidence, that the numbers were “rigged” and had the director fired.

That’s a lot to unpack and defend and State of the Union addresses have not historically been places where presidents break down the minutiae of their policies. It’s therefore not surprising that Trump and his speechwriters decided to skip past the BLS numbers to other things.

Still, reducing the size of government is one legitimate policy win as well as a “promise kept” that Trump can claim.