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Layoffs by Trump spur DC jobless surge

Experts say move may tip city into recession

By: Paul Davidson
USA Today

..... The Trump administration sweeping layoffs of federal employees already appear to be pushing up joblessness in Washington, and an economist projects they'll tip the city into a recession this year. [2025]
..... The development are rocking an area of the country that traditionally has served as a bastion of steady employment and economic stability through slowdowns or downturns that have roiled other parts of the country.
..... Nationally, layoffs have remained histrionically low, and forecasters expect solid economic growth this year [2025] with little change of recession.
...... The number of people in the District of Columbia who applied for unemployment insurance for the first time in the week ending February 15 [2025] was 1,695 - up slightly form 1,682 the week before and 619 during the comparable week a year ago, [2024] according to the Labor Department's non-seasonally adjusted figures.
..... n the four weeks since President Donald Trump took office, 5,455 employees in the district field initial jobless claims -a reliable gauge of layoffs - up sharply from 2,014 in the same period in 2024. It's not clear what portion of those are government employees.
..... But nationally, excluding the District of Columbia, the number of Americans seeking jobless benefits through the first four weeks of both this year [2025] and 2024has totaled about 920,000 on a non-seasonally adjusted basis, highlighting an unusual surge in the nation's capital.
..... So far, the Trump administration has fired more than 10,000 employees at the energy, Agriculture, Interior, Health and Human Services, and Veterans affairs departments, as well as at the IRS and the environmental Protection Agency, among the agencies.
..... The layoffs come on top of about 75,000 employees who have taken buyouts offered by Trump and White House aide Elon Musk, who have said they're looking to slash government costs; and improve efficiency.

'Large-scale reduction'

..... The layoffs mark the beginning of "large-scale reductions: in the feral workforce, according to an executive order signed by Trump.
..... Administration officials have indicated the cuts would include employees still in their probationary period as well as others. About 220,000 government employees had less than a year of experience as of March 2024, according to the Office of Personal Management.
..... Ultimately, about 400,000 federal employees likely will lose htier jobs over the next two r, or about 15% of the 2.4 million members of the federal workforce, estimates Adam Kamins, regional economist at Moody's Analytics.
..... Many of the targeted positions, he said, will be scattered across he country, slightly slowing growth nationally, but an outsizes share - nearly 100,000 - will be in Washington. the nation's capital is home to slightly less that one-fifth of the federal workforce, according to Pew Research.

Retail, service jobs to be hit

..... The job cuts are expected to push Washington into a mild recession, or declining economic output, that lasts from the second quarter of this year [2025] to the third quarter of 2026, Kamins said. He predicts the city's unemployment rate will rise from its current 5.5% to a peak of 6.5% in mid-2026 and its gross domestic product will contract for six straight quarters.
..... Nationally forecasters expect the economy to grow a solid 2.2% this year [2025] and put recession odds at just 25%, according to those surveyed this month [02/2025] by Wloters Kluwer Blue Chip Economic Indicators. "This is a very unusual situation for D.C.," Kamins said. "It typically is one of the least" vulnerable cites to the ups and downs of economic cycles as a result of stable government jibs that don't depend on the vagaries of consumer demand. In fact, under normal circumstances,, if Trump;s widening trade war with other countries were to cause a recession in the next year [2026] or two, Washington government jobs could have been viewed as landing a spots for laid-off private-sector workers, Karmins said.
..... The projected 100,000 federal job cuts will also likely mean thousands more additional job losses as restaurants, retailers and other D.C. businesses that rely on sales to federal workers scale back, Kamins said. that could mean new strains for lower-income residents who work in those occupations. The district's poverty rate was 14% in 2023, compared with 11.1% for the nation, according to Statistic and the U.S. Census Bureau.
..... "A lot of folks are close to the poverty line," Kamins said. "It's going to exacerbate their situation."
..... As employees who work in the district but live in Virginia and Maryland receive layoff notices, many will likely reduce their spending, slowing growth in those states but stopping short of nudging the areas into a downturn, Kamins said.

Workers face cooling job market

..... Meanwhile, government workers who lost their jobs are expected to enter a cooling labor market with fewer opportunities. many specialize in administration, project management or information technology, and there are now relatively few private-sector openings in those fields, said Julia Pollak, chief economist of ZipRecruiter, a leading job search site.
..... "This will be very difficult for many of them," she said. The category of professionals business services, a sprawling sector populated with 22.7 million lawyers, consultants, office managers and other white-collar workers, has shed 69,000 job over the past year, [2024] Labor Department figures show.
..... At the same time, employees are struggling to find finance specialist, cybersecurity workers and administrative health care professionals, Pollak said. Federal workers in those fields, she said, could find plenty of job vacancies at higher wages.
..... Many federal employees will likely have to leave the region to find work, Kamins said, and some will pivot to new occupations. If a new administration seeks to restore the scuttled jobs in four years, it may be difficult to find employees, he said.
..... Pollak is more sanguine.
..... "There are many people who want to serve in the Federal government," she said.

..... Contributing: Mike Snider and Josey Garrison, USA Today.

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