D.C. by the Numbers: Federal Workforce Cuts Hit Local Economy Harder Than Expected

Washington, D.C. has lost 12,400 federal jobs since January, according to data released this week by the D.C. Office of Revenue Analysis. That represents a 4.7 percent drop in the city's federal workforce, the steepest six-month decline since the base realignment and closure process of the 1990s.

The numbers underscore a broader shift in the city's economy under the Trump administration's ongoing restructuring of the federal government through the Department of Government Efficiency, or DOGE, initiative. The job losses are concentrated in agencies such as the Department of Education, the Environmental Protection Agency, and the General Services Administration, all of which have regional offices in D.C.'s federal triangle and Southwest waterfront.

Local Businesses Feel the Squeeze

The impact is showing up in neighborhood-level data. In NoMa, foot traffic at the Harris Teeter at 2500 First Street N.E. dropped 8 percent in June compared to June 2025, according to foot-traffic analytics firm Placer.ai. The NoMa Business Improvement District reported that lunchtime crowds along the Metropolitan Branch Trail are down an estimated 15 percent since March. At the Union Market district, two sandwich shops and a coffee roaster have shortened their hours.

Restaurant sales data from D.C.'s Office of Tax and Revenue shows that gross receipts for eating places in Ward 6, which includes Capitol Hill, Navy Yard, and parts of NoMa, fell 6.2 percent year-over-year in the second quarter of 2026. Metro ridership on the Red Line at the NoMa-Gallaudet U station averaged 4,100 weekday exits in June, down from 4,800 in February, according to Washington Metropolitan Area Transit Authority data.

Housing data shows a similar pattern. The median asking rent in the District fell to $2,445 in June, a 2.3 percent drop from $2,503 in January, according to the D.C. Policy Center's monthly housing tracker. In the Anacostia neighborhood, where city officials have pushed for mixed-income development around the Anacostia Metro station, rents fell 3.1 percent over the same period, a sign that the federal job losses are hitting communities east of the Anacostia River particularly hard.

Budget Shortfalls and Next Steps

D.C. Mayor Muriel Bowser's administration is facing a projected $248 million revenue shortfall for fiscal year 2027, according to the city's chief financial officer. The CFO's office cited the federal job losses and reduced consumer spending as primary causes. The mayor has called for a hiring freeze across non-public-safety agencies and is considering a proposal to raise the sales tax by half a percentage point, which would generate an estimated $62 million annually.

City residents can weigh in at two public forums scheduled for next week: Tuesday at 6:30 p.m. at the Deanwood Community Center, 1350 49th Street N.E., and Wednesday at 6:30 p.m. at the Columbia Heights Community Center, 1480 Girard Street N.W. The D.C. Council will take up the revised budget in its September session.