Maybe I’m missing something, but why can’t it be true? If I’m a PhD deciding what to do with the next few years of my life, the fact that government jobs currently seem very unstable might make PhDs hesitant to choose this path. There’s probably also at least some PhDs (given the overwhelmingly left leaning politics of grad students) that don’t want to be involved with this administration. So maybe more PhDs are going into the private sector.

On the other side, budget cuts might mean that you have less money to spend on the PhDs that are interested.

So it doesn’t seem inherently contradictory to me.