Brookings data shows the D.C. metro region continues to stand out in regional job losses 

Guest:	Tracy Loh
Title:	Fellow, the Brookings Institution
Summary:	New data from Brookings shows the Greater Washington region is still losing ground on jobs, raising questions about how economic systems tied to federal work are adapting or failing to over time. The region is responding strategically, but so far, those responses haven’t translated into measurable improvement.

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Interview transcript

Terry Gerton About six months ago, we checked in with Brookings when you first rolled out the DMV monitor and were trying to capture the changes in the workforce that we’re following through from the Trump administration’s early actions. Now, as I said, we’re six months out. You’ve posted an update. What are the biggest changes that you’re seeing kind of at the high level? And then we’ll dig in.

Tracy Loh Well, the biggest change that we’ve seen is that in 2025, the DMV metro area, right, the area in Maryland and Virginia surrounding the District of Columbia, that region lost more jobs in 2025 than any other major metro area in the entire United States.

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Terry Gerton That’s a pretty big change. Not just a percentage share, but actually more jobs by county.

Tracy Loh It was also the biggest percentage share, but it’s also the biggest job loss in absolute terms.

Terry Gerton Let’s start to break some of that down then, because we talk and our listeners are used to hearing us talk about job losses from federal government actions, but this was bigger than that. So kind of walk us through the pieces of the labor market and what you saw.

Tracy Loh Sure. The vast majority of the job loss that occurred in the DMV in 2025 was federal, I think something like 95%. The federal government is the nation’s largest employer. And so the federal government shedding workers caused job loss in a lot of metro areas nationwide. The DMV was disproportionately impacted, you know, because it has higher exposure and then also these policies weren’t applied uniformly, right? This isn’t like sequestration. So, the federal job loss was particularly steep here, but something else different that happened in the DMV that didn’t happen anywhere else is that we also lost private sector jobs. Private sector work nationwide is, the growth is slowing, but it’s still positive, or at least it was in 2025. But here in our region, we also loss private sector jobs.

Terry Gerton One of the assumptions I think that the administration had, or at least that they said was, these displaced federal employees could switch to higher productivity jobs in the private sector. What you’re saying maybe is that that didn’t happen.

Tracy Loh Yeah, so you’re quoting the famous ‘Fork in the Road’ email that was sent to federal workers. And at least what we’re seeing in the DMV is that actually impacts to the private sector in terms of job growth slowing, that began even before the end of the federal fiscal year when the deferred resignations of the fork took effect. We saw private sector job growth, it was still positive, but the rate of growth plateaued over the summer of 2025 and then became negative by the end of the year.

Terry Gerton Was that a function of the Trump administration’s reduction in contract work, DOGE activities that they were drawing down early on?

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Tracy Loh So we can’t be 100% sure, but it does seem very likely because the sectors within the DMV that are shedding jobs are the main sector that’s losing jobs is professional services. And so that’s where you’d expect to see a lot of contractors in that sector category. There are some sectors of the economy that are adding jobs. So I think that the question of this idea of transitioning from federal work to the private sector is that, well, the private sector’s — the categories that are adding jobs are construction, healthcare, leisure and hospitality and state and local government. And so I do think there’s been some transition into state and local government, but that growth is something like 5,000 jobs. It’s not nearly enough to absorb the over 50,000 federal jobs lost in the DMV last year.

Terry Gerton Talk to me a little bit about how the timing of that ‘Fork in the Road’ policy played out in the numbers that you saw. You might’ve expected a gradual decrease and this became a little more like a step function, didn’t it?

Tracy Loh Yeah, well, you know, the issue all along was that nobody knew how many people were going to voluntarily opt into the deferred resignation program, right? The administration itself was kind of disclosing kind of bits and pieces of that, but there hasn’t been a ton of comprehensive accounting. And so we had to wait until the end of the federal fiscal year in order to see the choices and experiences of those workers reflected in the Bureau of Labor Statistics unemployment data, because even if they opted into the deferred resignation program over the summer, they still got paid through the end of the federal fiscal year, and so they don’t count as unemployed until October.

Terry Gerton And so when did those numbers start to show up in the data?

Tracy Loh So we can now see them in the November unemployment data. And so what we did is just analyze through the end of calendar year 2025, in order to see those impacts. And so, what we see is that what we saw in terms of unemployment happening, unemployment was rising earlier in the year — and part of that was contractor job loss. And now we see the full scale of what happened with the deferred resignation program. And that’s a huge surge in unemployment, especially among Black workers and among women workers.

Terry Gerton I’m speaking with Tracy Loh. She’s a fellow at Brookings Metro. Tracy, I wanna ask you to dive into those two features you just talked about, the differences across ethnicities, demographics, genders, what did you see play out here?

Tracy Loh So we see the same pattern that’s actually happening nationwide. Unemployment is up a bit everywhere in the country, just a bit, but it’s up almost twice as much for Black workers. And so we see that kind of the same proportional increase happening here in the DMV. Unemployement is up almost a whole point for white workers in the DMV, but its up over two percentage points for Black Workers. And that is a huge increase in a single year. And it’s really concerning because it may make inequality work worse. And then also because the region, residentially speaking, is somewhat racially segregated, that means that the fiscal impacts of this job loss will be disproportionately felt by some jurisdictions more than others, even though it’s one labor market.

Terry Gerton And the impact on women?

Tracy Loh So similar concern here, that anything that affects women’s labor market participation, it actually weakens the economy because women are half the workforce and have a lot of skills. And so losing their productive engagement in the workforce will have a negative net impact on GDP.

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Terry Gerton And so when you think about the intersection of those two sets, the black workforce and the female workforce, Black women have been even more disproportionately affected from the federal job market losses.

Tracy Loh Yeah, I think that’s the logical conclusion of what we see in the unemployment data.

Terry Gerton And the other thing that I think your analysis pulls out is it is not just the U.S. areas around D.C. That are impacted by this, but it reaches more broadly into the Maryland, Virginia, West Virginia area, right?

Tracy Loh That’s right. In fact, while we did see that the biggest increase in unemployment is for residents of the District of Columbia themselves, we also saw really high increases in unemployment in Montgomery County, Prince George’s County, and Charles County in Maryland. And when you look at what’s happening in terms of trends with private sector job growth, you know, that’s an area where Northern Virginia has been — with the exception of Prince William County — has been largely impacted in very much the same way as the Maryland counties.

Terry Gerton So Tracy, the local leaders, local government leaders, have had a chance to absorb this kind of information and knew the direction of the trend, even before they saw perhaps the particulars. Are you seeing evidence that local policy responses are beginning to align with what this data is telling you? Are there new programs, new trends, new directions that local governments are moving in?

Tracy Loh Yes. So the region came together through the Metropolitan Washington Council of Governments to create a new career platform called TalentCapital.ai. It’s a website that has a job board, but it’s so much more than that. It will also help with resume translation, with skills matching between occupations. It is a really powerful tool for, if you are a mid-career worker, for example, who already has a lot of skills and experience, it’s a really powerful tool to help translate those skills and experiences potentially to other sectors. Because the federal government has always had a really specific vocabulary with lots of acronyms and a really specific way of doing hiring and pathways. And so people who have been in that ecosystem for a long time have a big cultural competency challenge in re-translating their skills and experience to other sectors that use a different vocabulary and way of doing business. And so it’s great to see that tool become available to workers in this region.

Terry Gerton Tracy, as you continue this analysis, are there lessons that can be learned from the DMV region’s experience and response to this disruption in the labor market that might be applicable to other areas of the country?

Tracy Loh You know, I actually think it’s the other way around. I think what’s happening is that right now, it’s time for the DMV to learn from major labor market disruptions that have happened. Many other regions in the country have been through labor market disruptions like this before. We know from that experience how serious and painful and hard this is. There’s no region that can absorb a labor market shock of this size without negative impacts. And so we need to look to the lessons of those regions in order to understand how to manage the disruption and grow out the other side.

Terry Gerton Which examples would you offer?

Tracy Loh So I think the classic one that everyone thinks of is the Great Lakes and the big disruption of what’s happened with auto manufacturing or even manufacturing in the bigger picture. That caused a huge shock there that is frankly like far beyond what the DMV is going through right now. But if you look, for example, like think of Pittsburgh, right, and how the disruption of the steel industry caused a big economic transformation in Pittsburgh. But the city has reinvented itself as an ‘eds and meds’ economy and is now growing again.

Terry Gerton So there’s hope.

Tracy Loh There’s always hope. And really with the DMV, this is a big shock. But the other thing I learned from the DMV Monitor and this comparative research approach is that the DMV’s fundamentals, economically speaking from an investment perspective, remain very strong. Still relatively low unemployment, very low crime, better credit. This is an incredibly highly educated workforce. This is a region that has a lot going for it. But in order, for example, to attract new employers, there are some fundamentals that that would need to be addressed, like, for example, the very high cost of housing.

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