DC area braces for steep jobless spike, report warns

The DC region’s unemployment rate could more than double should federal workforce cuts continue, according to a new Urban Institute analysis as reported by the Washington Business Journal. The study projects that unemployment could soar from to 7.3% from 2.8 percent if half of all federal civilian jobs in Greater Washington are eliminated.

DC faces the greatest risk, with one in four workers employed by the federal government and income taxes from those workers making up 27 percent of city revenue. By the Urban Institute’s estimates, a 50 percent cut to federal jobs would inflate DC’s unemployment insurance payouts by roughly $1 billion.

The Trump administration’s cost-cutting measures have already triggered layoffs. The Small Business Administration recently announced plans to reduce its workforce by 43 percent, and the Department of Education will shed around 1,300 employees. Nonprofits reliant on federal funding may also face dire straits, as nearly two-thirds of such organizations in the District risk losing critical contracts.

Analysts warn that as agencies implement further reductions, unemployment claims are poised to rise—leaving local officials and affected workers on high alert for additional federal decisions that could reshape the region’s economic landscape.