Washington, DC’s economy is at risk of recession due to mass layoffs in the federal workforce under the Trump administration’s restructuring. Thousands of workers have lost their jobs, impacting consumer spending and local businesses.

Tyler Wolf, a former employment attorney at the Department of Health and Human Services, lost his job and is now cutting expenses, reflecting the financial strain on many federal employees. Economists at Moody’s predict DC could enter a recession this year, with Oxford Economics forecasting 33,700 job losses in 2025, leading to an estimated $4.9 billion in lost wages.

Local businesses are already feeling the impact. Timgad Café in the Ronald Reagan Building has seen a 25-30% drop in foot traffic, and other small businesses are reporting similar struggles. The housing market is also shifting, with a rise in home listings as more people consider leaving the city.

A federal judge recently ruled that some laid-off workers must be reinstated, offering temporary relief. However, experts warn that the broader economic slowdown will continue to affect retail, hospitality, and housing, with deeper financial consequences expected in the coming months.