In the monthly edition on 12 August we told readers what we would check next. One item on that list was state unemployment for July, due around 21 August, and the reason given was this: a quarter of a million federal jobs is not spread evenly, and the national rate hides where it lands.
The data has arrived. The answer is that the federal reduction has left no mark on any state's unemployment rate, including Washington's, and the explanation for that turns out to be more interesting than the finding we expected.
It also turned up something larger on the way. Over the year to July, unemployment rose in exactly as many states as it fell in, while the national rate went down.
What we said we would check
Federal employment stood at 2,935,000 in July 2025. In July 2026 it stood at 2,683,000. That is a fall of 252,000 jobs, or 8.6% of the federal workforce, in twelve months.
It is worth pausing on how large that is. Total employment across the entire economy grew by about 316,000 over the same period. The federal reduction is therefore roughly four fifths the size of the whole country's net job creation, running in the opposite direction, inside a single employer.
The reasonable expectation, and the one we set out in August, was that a reduction of that size would be visible somewhere on a map. Federal work is thought of as a Washington industry. If a quarter of a million of those jobs went, the District of Columbia, Maryland and Virginia should be carrying the weight of it.
