There's some crazy stuff going on in the economy right now. In particular, Americans are thinking that we're going to hit a recession by the end of 2025. Over twothirds of Americans now think that the unemployment rate is going to go up over the next 12 months. That's the highest level of economic pessimism since 2009 and suggest that you guys out there need to start being careful in the economy, in the housing market, in the stock market because the storm clouds seem to be growing bigger and bigger by the day. Uh we're seeing the stock market now enter a correction.
And we're seeing more and more people get laid off, especially from the US government. And these things are now slowing the economy. And you know, the question I'm asking myself is, are we finally on the precipice of this long-awaited recession? Are we going to see this downturn play out? And in this video, I'm going to analyze the data for you so you can better understand what's likely to happen in the economy over the next year. And the first place I want to start is the government layoffs.
We've had up to around 250,000 government job layoffs or voluntary resignations so far according to Bloomberg. That's absolutely massive. That's a lot of people who were formerly earning a stable income with the US federal government who are now no longer earning income. And those government job losses are starting to show up in earnings reports from big Wall Street companies.
And this is what you got to pay attention to everyone to see the real impacts of Doge. United Airlines is saying that government travel is down 50%. They're lowering their forecast. Accenture, the big consulting firm, is saying that their government contracts are plummeting. And so, we're actually seeing the Wall Street companies now confirm what we're seeing with the Doge layoffs. And the result is lower consumer spending. We have two months in a row to start the year, January and February, where consumer spending came in below expectations. It seems like Americans are starting to tighten the belt. That's an issue for the economy, right? Because 70% of the US economy is consumer spending. So, if consumer spending were to slow or go negative, that would trigger a recession. And one particular city where I think we could see this recession hit is actually where I'm standing right now. I am standing in Alabama in a town called Huntsville. You can see the Huntsville Museum of Art right behind me.
And what a lot of people don't know about Huntsville is that it has one of the highest percentages of federal government jobs of any city or metro in America. Over 17,000 employees in Huntsville work for the federal government and that's because the federal government has a big presence down here with NASA, the military as well as the FBI. And uh they interviewed the Huntsville mayor and he's concerned about the layoffs that are happening right now with Doge. He thinks potentially there could be some issues in this city uh that could negatively impact the economy and housing market. But the reason I'm bringing up Huntsville is that there's a lot of cities around America that are exposed to the federal job layoffs that you wouldn't necessarily be aware of. And a crazy fact that I just learned was that less than 25% of all federal government workforce is in DC.
That's right, everyone. So less than 25% of the federal government jobs are in DC, Maryland, and Virginia. Meaning 75% of the government jobs are in the rest of the US. So, in case you thought like your city was immune to Doge and its economic impacts, well, that's not necessarily the case. There's a lot of federal workers all spread across America, meaning that there could be big economic ramifications to these layoffs.
And it seems like Americans are getting more pessimistic by the day in terms of where this economy is heading in 2025. The University of Michigan does a consumer sentiment survey and consumer sentiment is now at the lowest level that we've seen since the big bout of inflation in 2022. And it's actually at one of the lowest levels on record. Americans feel very gloomy about the economy. And over twothirds of Americans think that unemployment is going to increase in the next year.
And why this is relevant for you guys out there is that if you're trying to track where the economy is heading and you care about home prices and stock prices and your odds at maybe finding a job or getting a promotion, you need to understand these statistics because the last time we saw 2thirds of Americans thinking that unemployment rate is going to go up, we were in 2008 2009. And actually, every time that this many Americans have thought that the unemployment rate is going to go up, we've had a recession in the last 50 years. And some of the big departments that are getting cut by Doge right now include the IRS where apparently the plan is to cut half of the workforce in the IRS down from 90,000 to 45,000. We haven't seen that actually happen yet, but that's the rumor. Additionally, Office of Veterans Affairs might see as much as 80,000 job cuts, while HUD, the Department of Housing, is rumored to see around a 50% job cut. Now, some of these job cuts by the Trump administration have been blocked by various courts in America. So, we're going to have to see over the next couple months how many actually go through.
However, I think it's pretty clear the current presidential administration wants to lower the size of the government. They have almost four years to do it. So, I think um the initial Doge cuts are probably going to be just the opening salvo in lowering the government workforce. And actually, something like this happened in the mid90s, everyone. Um a lot of people aren't aware of this is that the Clinton administration previously did their own version of Doge. The Clinton administration did uh something called reinventing the government and they cut 426,000 federal jobs over 7 years. Now, Bill Clinton was a Democrat. That was a Democrat presidential administration that actually cut over 400,000 government jobs. And actually, they ended up balancing the budget and producing a budget surplus in the late 1990s. So there actually is some historical precedence for these type of job cuts working in favor of Americans because I think most people would say having a more balanced budget, lowering the deficit would be a good thing. That would bring interest rates down. And to the extent that there are government jobs that are duplicative or aren't u productive, we should probably save the taxpayer money by eliminating them.
Now, one thing I see a lot of people say out there is that we're not going to have a recession and that like this is all overblown. You know, in particular, I see a lot of people in the comments section trying to say that like, hey, nothing bad is really happening. They say home prices are still going up. So, like, no need to fear is what some people say out there, especially those who are realtors and mortgage brokers and investors in the housing market. They don't want to entertain the idea of a recession because they know what that's going to mean for their business. And I think the thing to understand about the housing market is that it's a lagging indicator in terms of prices.
Home prices are always the last thing to go down in the economic cycle. And on a national basis, prices are still up year-over-year. However, they're going down in states like Florida and Texas and Arizona, and they will soon be going down in many other states in 2025 due to the big wall of inventory. So, I actually think what's going on in the housing market right now supports the idea that there's an economic slowdown. We have the highest price cut rate on the housing market in a decade.
We have the most inventory in 5 years. And in about half of the US states, sellers are starting to get desperate and cut the price. Now, I want to take a quick second and actually tell you guys a little bit about Huntsville, Alabama, because this is a city that's really, really interesting. Not a lot of people know about it. It's in northern Alabama, and it actually is one of the most educated cities in the south. It has a fairly high college degree rate, has a really high median income. In fact, in Huntsville, the median household income is higher than Nashville. in Atlanta. The college degree rate is higher than Nashville in Atlanta. And the reason that's the case is because actually there's a lot of government jobs here. The FBI has their de facto second headquarters in Huntsville. You have a lot of military presence at Redstone Arsenal. There's also a big presence with NASA as well as various military contractors like Lockheed Martin.
We also have Amazon Blue Origin, which is Amazon's space exploration program is here in Huntsville. And I'm in the center of downtown Huntsville right now. And this is an area where we are starting to see the economic slowdown show up in the housing market. So home prices in Huntsville are now going down. They're fairly affordable. The typical value is barely over 300,000, but the prices are starting to drop. And there's been a big surge in inventory and supply on the market. Now, when you look at the listings here in Huntsville, it's crazy how relatively affordable it's going to seem to you guys. You could buy a new build house in certain parts of Huntsville for around $270,000.
In some neighborhoods, you can get houses for around 170, 180,000. Lots of affordability here, even though that the prices went up during the pandemic. The rents here are also really cheap. Uh you could rent a brand new town home, brand new house, 3b, 2 and a half bath for around 1,800 a month in some of the suburbs to the west of Huntsville. There's actually some really nice suburbs in Madison to the west of here where the median income is over a hundred grand.
The schools are a 10 out of 10 and you could buy a house for 250 grand. So, there's still some relative affordability here in Huntsville, Alabama. And I actually like this market in the long term. Like, if you're talking 10 years, if you have a 10-year time horizon as an investor or a home buyer, and that's, you know, where you're looking for your appreciation over the long run, I think Huntsville could be a good place to buy. However, in the short term, it's definitely going to have some issues in terms of its housing market. There's going to be a correction. The prices are already dropping. The inventory is way up, and the Doge cuts, the Doge cuts are coming for Huntsville. They're going to try to make up for it by potentially getting Space Command moved from Colorado Springs to Huntsville. We don't know if that's going to happen, but either way, this is a very interesting housing market that if you're an investor, especially read up on Huntsville and look at some of the data on Reventure App for Huntsville, Alabama.
I'll tell you how you can do that at the end of this video. But another concern I have about the economy is some of the data that's now coming out on GDP estimates. In particular, the Atlanta Federal Reserve has a GDP tracker where they try to forecast what the current GDP growth is going to be in the quarter. And their forecast for the first quarter of 2025 is minus2.8% GDP growth in the first quarter of 2025. Now, some of that has to do with gold imports and exports. If you exclude that, they're forecasting minus0.5% GDP growth on the quarter. So the Atlanta Fed is projecting a contraction in GDP in this quarter. And so for some of you out there again who are like not taking this economic slowdown argument so seriously and saying, "Oh, maybe the University of Michigan surveys are politically biased or maybe we haven't seen enough hard data say there's a slowdown." No, no.
The hard data is going into the Atlanta Fed model and predicting a decline in GDP. And if we get backtoback quarters decline in GDP, that's the technical indicator for a recession. And so there does seem to be something going on in the economy that goes beyond just the survey data. You know, some people say the survey data isn't that reliable because it's politically biased.
For instance, in the University of Michigan survey on consumer expectations and inflation, u often there's a big political bias. Like for instance, Democrats in the University of Michigan survey are the most pessimistic they have ever been about the economy in US history, like even worse than 2008 when it was happening. Meanwhile, Republicans are much more optimistic and independents are somewhere in between.
And so there are some issues with the survey data and that it could be skewed for political reasons. However, it's not just the survey data anymore. We're starting to see that hard data show a slowdown in the economy. And uh a lot of people are also wondering what's going to happen with tariffs. And there's varying opinions on how these tariffs are going to impact the economy. You know, you have some people who are doomsayers out there saying that the tariffs are going to cause a recession. You have other people saying that, hey, that's overblown. It's going to lead to like a one-time bump in inflation of maybe half a point. I really don't know myself. All I know is that the tariffs are increasing uncertainty. And so if you want to talk something about like the housing market, are people going to plop down their life savings on a down payment and assume a huge mortgage and buy a house in today's environment, I'm going to say probably not. There's a lot of uncertainty in the economy right now.
And if you're going to make big big purchases, big big decisions, take out debt to do it, you probably want to feel like there's more security about where the economy is heading. And the economy right now does appear to be in a period of transition where the odds of recession are spiking. Goldman Sachs just reported that uh they revised up their recession forecast for 2025 to 35% odds.
And Goldman also revised down their GDP forecast to only 1% for the whole year in 2025. Even the big Wall Street banks are now expecting a big slowdown. But again, how big the slowdown is going to be is going to depend on local dynamics in the market. Like one state I think is going to get hit hard in 2025 economically is Florida because prices of homes in Florida are already dropping, right? And when home prices drop, that's not good for the local economy, right? Because all of a sudden people see the value of their house go from 400 grand to 350 grand, maybe they go underwater on their mortgage. What's the first thing they do? They tighten their spending. So I think we're going to see a knock-on effect in some regional housing markets this year of the housing slowdown that's already occurring.
States like Florida and Texas and Arizona, potentially Tennessee, Alabama, Georgia. These states could see some local economic slowdown just due to what's going on in the local housing market. On top of that, you also want to consider how exposed your area is to government job cuts. On this table, we're looking at the metro areas in America that have the highest percentage of federal workforce as a percentage of total employment. He sees a lot of these metros have as much as 5 6 7% of their jobs in federal government workers. Huntsville is one of them around 6 to 7%. The higher that federal job exposure is, the greater the risk that there could be a local economic issue due to the job cuts. You can see it's a lot of military towns. A lot of towns actually in the south have a high exposure to government workers.
On this map, you can see it the percentages state by state. So overall about 2% of total workers in America work for the government. So there's around three million government workers on a total of around 150 million employees. The higher that percentage, the greater the risk of job losses due to Doge and the government job cuts. These areas in orange, these states in orange have the highest exposure. Interestingly, a lot of states out in the Mountain West have a high percentage of government workers. I think due to the parks departments out there and so it's also a lot of smaller towns, smaller states you wouldn't necessarily expect with government job exposure.
And again, I would think the housing market is going to be a leading indicator for some of these economies. If you see housing inventory going way up in your city or zip code, if you see prices starting to turn down, that's a signal maybe that there's some issues in the local economy as well, what I would suggest you guys do if you want to track this data uh more intently, go and download the Reventure mobile app.
We are now in the app store and uh check out the data on home prices and inventory in your city and zip code for almost every zip code in America. Just understanding that home price and inventory data is a great way to get started in assessing how your local housing market and potentially your economy is doing. And then if you want to take it to the next level and understand where home prices are heading in the future, upgrade to the premium account on the Reventure mobile app so you can unlock our home price forecast score and over 40 other premium data points. Download that app right now in the app store and let us know in the comments section below what you are seeing in your local economy and housing market. Are you seeing the layoffs? Are you seeing home prices start to drop or do things still look good in terms of the economy and housing market? Let us know in the comments section below.
You guys are my eyes and ears on the ground. Until next time, this is Nick from Reventure..