Linneman Letter – March 2026

The following is an excerpt from the Spring 2026 edition of The Linneman Letter:

Looking back to 2025, significant events included the 9.5% drop in the federal work force, federal taxes remaining largely unchanged, the border being effectively closed, lower inflation, and events in the Middle East. None of these were easy. All were heralded by the media except the decline in the federal work force. And yet this decline is one of the most astounding economic phenomena we have seen in our life. After all, federal government employment rose by 2.6% during Trump’s first term and 3.8% during the Biden administration, before falling by 287,000 (a stunning 9.5%) in 2025. It fell an additional 29,000 and 10,000 in January and February 2026, respectively. In fact, since federal employment peaked in January 2025, it has fallen by 10.8% (326,000 jobs) through February 2026. Interestingly, the decline began after Trump’s election but before he took office. We view this decline as a short-term negative but a big, longer-term positive. It will move many workers from jobs focused on restraining growth and transferring wealth to jobs that create wealth. 

Read the entire article – Linneman Letter – Spring 2026