The DC area’s business leaders are deeply worried about the region’s prospects after President Donald Trump’s federal government cuts. As expected, the economic wounds from losing 300,000 federal jobs are very real, and they extend across the entire DC, Maryland, Virginia region.
A report published this week by Brookings and the Metropolitan Washington Coalition of Governments looks at the DMV holistically, and finds that since January, the region’s unemployment rate has risen by more than eight times as much as the national rate— and ballooned particularly in the suburbs. Federal jobs have vanished more precipitously in the DC area than they have in other parts of the country, and job growth in the private sector is stagnating. At the same time, more households in the DMV region are showing signs of financial distress.
Total employment has risen in most major metro areas this year— but not here. Of the US urban areas with more than 1 million residents, DC ranked 43rd out of 55 in job growth in the first part of this year. It’s a bleak picture.
“The largest company, overwhelmingly, is cutting jobs,” says Clark Mercer, the executive director of the Council of Governments. “Really smart talented people have a decision to make: do they stay in this region, or do they look elsewhere for work?”
The report goes deeper than just raw unemployment and job growth numbers. It shows impacts to venture capital investment, entry-level jobs, home listings, and even personal credit ratings.
When the federal workforce cuts began, Virginia governor Glenn Youngkin defended them, touting his state’s many open jobs in the private sector. But nearly 80 percent of new private sector jobs in the DMV were in construction, hospitality, or healthcare, which don’t fit neatly with the professional backgrounds and skills of the former federal workers, according to the Brookings report.
At the same time, entry-level options for young professionals in DC are collapsing: internship openings fell by 36 percent in the DC area from 2024 to 2025, a much more dramatic decline than in other cities.
The Council of Governments, working with the Washington Business Journal, has been looking for ways to quantify the economic impacts of Trump administration policies since January. But data from the region’s various municipalities was initially inconsistent and difficult to parse, obscuring the picture.
DMV Monitor, the group’s new project, tracks information about jobs, bankruptcies, federal funding dollars, unemployment, patent filings, research grants, air travel, transit ridership, credit ratings, and more from DC and surrounding counties in Maryland and Virginia.
There are still plenty of unknowns, and the report’s authors hope that the DMV Monitor will help policymakers keep track of them. Residential real estate listings in the DC area have already skyrocketed to double that of similarly sized metro areas, but it’s not yet clear that every one of them represents someone leaving the region altogether.
Similarly, some of the impacts of the federal law enforcement takeover haven’t been fully felt yet. The report notes that violent and property crime had been declining year-over-year around the region before the takeover began, and points to the exertion of federal powers over Union Station and the Kennedy Center as having uncertain impacts on consumer spending and the city’s cultural landscape.
There’s also the open question of how many more reductions in workforce will take place, and whether the feds will move any agencies out of the region wholesale. If NASA moves to Ohio or Florida, how many more jobs would leave the DMV forever?
The authors of the report have one key message: it’s important for DC, Maryland, and Virginia to work in concert to provide for the future.
“The future of the region can be something that happens to us that we’re watching in horror,” says Tracy Hadden Loh, a Brookings fellow who helped author the report, “or we can be part of it.”
