D.C.'s DOGE recession is fast approaching

Signs of a DOGE recession are flashing in D.C. — rising unemployment, less credit card spending and jitters about more federal cuts.Why it matters: A local "mild recession" is expected as the Trump administration downsizes the capital city's big factory — the federal government, employer to 17% of the region's workforce.State of play: Even before most of the federal job cuts, the number of unemployed residents in D.C. increased 12.2% in February over last year, city stats show."Negative" is the city's credit outlook, Moody's Ratings declared last month. The agency yanked D.C.'s perfect triple-A bond rating, making it potentially pricier to finance projects.Spending at big retailers in the region dropped 2% in April, the Washington Post reported after crunching credit card data from Earnest Analytics. Everyday locals are skipping pricey gym memberships and dining out less, business owners tell the Post.D.C. home listings are soaring.Zoom out: There's pain in the suburbs, including in Maryland's Prince George's County, which has a prosperous Black middle class. The unemployment rate rose to 3.5% this year, from 2.2% in March 2023.Trump canceled plans to build a new FBI headquarters there — and the Washington Commanders and Six Flags America are leaving, the Post noted.In tech and defense-rich Fairfax County, Virginia, the jobless rate rose to 3.2% in March, from 2.2% last December.Then: The federal government insulated D.C. from the worst of the Great Recession, then powered an economic boom. D.C.'s population grew about 14.6% between 2010 to 2020, according to the Census Bureau. Cranes dotted the skyline.Now: D.C.'s economy is projected to contract by 1.9% next fiscal year, the D.C. Chief Financial Officer says. Construction has slowed, with residential building permits dropping 33% as of February.The vibes are bad — 79% of area residents think the Trump administration's cuts to federal programs and jobs will hurt the local economy, according to a new poll by the Post and George Mason University's Schar School of Policy and Government.What we're watching: Mayor Muriel Bowser's 2026 budget plan is the next economic indicator. Deep cuts to services are expected, at a time when the city wants to invest in a pricey redevelopment anchored by a new NFL stadium.

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