The Government Shutdown Will Be Devastating for the D.C. Region
Previous closures have had a significant impact on the regional economy. During the closure of the government of 2013, which lasted just over two weeks, the DC zone experienced a reduction of five points from personal consumption expenditure, according to a 2023 FISERV report. The closure of the 35 -day government which lasted the end of 2018 in the first weeks of 2019 had a spectacular impact on the regional economy. According to city officials, this cost DC more than $ 47 million in income. Another estimate revealed that the region lost $ 1.6 billion in economic activities and profits during the first 25 days of January 2019, although some of them were recovered when federal employees were reimbursed.
But the current economic situation could exacerbate the effect of a closure. Moody’s Analytics estimates that the district itself will experience a drop in GDP in the second quarter of 2025 in the third quarter of 2026, federal layoffs resulting in total loss of 35,000 jobs in the third quarter of 2027. In the largest DC area, Begley stagnant.
The BrooKings report has revealed that the regional growth of the private sector has reached platforms in recent months and may be unable to absorb additional federal job losses. In addition, the industries that have experienced the greatest growth, such as construction and hospitality, are not necessarily aligned with the skills and experiences of federal workers who lose their jobs. These difficulties could lead to former federal workers – a generally highly educated and complaint population – completely leaving the DMV, which would in turn lead to new economic losses in the region.
