Data released by the Federal Reserve Bank of Richmond last week highlights significant changes in the labor market across the DC, Maryland, and Virginia (DMV) region, largely tied to federal workforce reductions and private sector spillover. Between January and May 2025, the region lost over 22,100 federal jobs, with Maryland and Virginia seeing the steepest declines. These cuts, concentrated in the Washington and Baltimore metro areas, have led to a significant rise in unemployment claims, especially in DC, where nearly a quarter of jobs are federal.

Unemployment Compensation for Federal Employees (UCFE) claims in D.C. surged by 543% between the same periods in 2024 and 2025, significantly outpacing increases in Maryland (110.7%) and Virginia (215.3%). Continued claims have also remained elevated, pointing to prolonged unemployment for many federal workers. According to the Richmond Fed, these trends underscore the broader impact of federal spending cuts, including reductions in government contracts, which have contributed to rising private sector job losses, most notably in the Professional, Scientific, and Technical Services sector.

Worker Adjustment and Retraining Notification (WARN) data also signals stress in the private sector, with most affected employees located in the Washington-Arlington-Alexandria metro area.

Read the entire report from the Federal Reserve Bank of Richmond here.