WASHINGTON (AP) — The Department of Government Efficiency’s remaking of the federal workforce has battered the Washington job market and put more households in the metropolitan area in financial distress, according to a report released Wednesday.
The number of homes for sale in the District of Columbia, Maryland and Virginia region, also known as the DMV, is up by 64% since June 2024, and the region’s unemployment rate is the highest in the nation, according to the DMV Monitor, a real-time data interactive created by the Brookings Institution with the Metropolitan Washington Council of Governments.
Washington has had the nation’s highest seasonally adjusted unemployment rate for four straight months. The unemployment rate was 5.3% in January and ticked up to 6% in August, compared with the 4.3% national average, according to Bureau of Labor Statistics data.
From the start of President Donald Trump’s second term in January, DOGE, led by his then-adviser Elon Musk, instigated purges of federal agencies with the expressed mission of rooting out fraud, waste and abuse. DOGE led to tens of thousands of job cuts, including layoffs and people who accepted financial incentives to quit. Some people were rehired, a reflection of the haphazard process. Although losses were felt around the country, the Washington area was particularly hard hit.
Scott Kupor, director of the U.S. Office of Personnel Management, said last month that there will be 300,000 fewer federal workers on the payroll nationwide by the end of the year. The government has about 2.5 million workers, including military members.
Contractors have been affected, too. DOGE’s website states that 13,231 federal government contracts have been terminated, totaling $59 billion in savings. In fiscal year 2024, more than 100,000 companies received contracts, totaling roughly $774 billion.
Besides the mass layoffs, the Republican president’s other actions to remake the image of the nation’s capital — including deploying National Guard troops and federalizing the city’s local Metropolitan Police Department — “could shape consumer spending and investment in the local economy,” the report says.
The report also says private-sector job growth is stagnating, “with many new jobs not aligned with the skills and experiences of most laid-off federal workers.”
“As a result,” it says, “job postings were not as robust as they were in peer regions, which is concerning when unemployment has soared, especially in the suburbs.”
Taylor Rogers, a White House spokeswoman, said D.C. “has often had the highest unemployment rate in the nation, even during Joe Biden’s federal hiring frenzy.” D.C.’s unemployment rate hit 11.3% at the height of the COVID-19 pandemic and fell to 5.3% at the end of Biden’s presidency. “This longstanding problem is due to an overreliance on federal bloat and sky-high crime, two problems that President Trump is quickly and successfully fixing by cracking down on crime in the Nation’s capital and implementing supply-side reforms that have already created over half a million private-sector jobs for American-born workers,” Rogers said.
The DMV region is home to the most college graduates of any major U.S. metropolitan area, and one-fifth of federal workers are concentrated in the area.
In July, the Supreme Court cleared the way for Trump’s Republican administration to downsize the federal workforce further, despite warnings that critical government services would be lost. The ruling does not apply to every agency, and other legal challenges to federal worker firings continue.
Additionally, hundreds of federal employees who lost their jobs in Musk’s cost-cutting blitz are being asked to return to work.
“The DMV region’s economy has grown even weaker than the nation in many categories due to the Trump administration’s seismic actions to shrink the federal government,” the report reads.
And given proposed additional cuts in the future, the DC Fiscal Policy Institute predicts it’s likely more Washington residents and others from around the region who work in Washington will lose their federal jobs over the coming months and years.
The latest Washington Office of Revenue Analysis figures show that initial unemployment insurance claims have jumped by 33.7% compared with this time last year.
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