The US District With The Highest Unemployment Rate Might Surprise You

In August 2025, the national unemployment rate hit 4.3%, according to the U.S. Bureau of Labor Statistics (BLS), a slight uptick from July's 4.2%. There are many reasons that factor into this increase, including President Donald Trump's imported goods tariffs, evolving immigration policies, and the firing of significant numbers of government workers. While many parts of the country are feeling the effects of this shift, the BLS reports that the District of Columbia has been hit the hardest, currently sitting at an unemployment rate of 6%.

Breaking this down, according to the Federal Reserve Bank of Richmond, federal employment only accounts for 1.8% of civilian, nonfarm jobs across the country. However, given that Washington, D.C., is such a political hotbed and so many government agencies have offices there, its concentration of government employees is much higher at 24.6%. In fact, the U.S. Congress reports that, out of the over 2 million federal civilian workers, 162,489 lived in the District of Columbia as of September 2025. Considering the BLS reports that 97,000 people have lost their government jobs since January 2025 — and around 15,000 of them were fired in August — it's no surprise that Washington, D.C., has been hit so hard by the unemployment crisis. But while government firings may be a large part of the explanation as to why unemployment is so high in the area, it's not the only reason.

As unemployment rises in an area, this typically has further economic ramifications as residents have fewer discretionary dollars to spend. The Restaurant Association Metropolitan Washington's March 2025 survey found that 44% of the District of Columbia's full-service casual eateries are very likely or somewhat likely to close in 2025. 82% of restaurants surveyed cited increased tariffs as part of the reason for this trajectory, while 68% acknowledged Trump's immigration policy changes played a role. The District of Columbia already has one of the highest small business failure rates in the country, per Lending Tree, and these factors are continuing the domino effect.

Of course, Trump's tariffs have impacted the job market in complex ways throughout the country, but that ripple effect is being felt in metropolitan areas like Washington, D.C., beyond direct firings of government workers and restaurant closures. An analysis by Apollo Academy's chief economist Torsten Sløk of U.S. Bureau of Labor Statistics and Macrobond data identified industries where tariffs are negatively impacting growth. Reportedly, many forms of skilled labor and trade are hurting, including manufacturing, mining, logging, construction, wholesale trade, retail, transportation, and warehousing. With such a diverse selection of opportunities being reduced, it's no surprise that cultural hubs like the District of Columbia are feeling the effects the most.