Alexandria is among the Virginia suburbs experiencing the biggest increases in unemployment since the Trump administration began dramatic federal downsizing in January, according to a Brookings Institution report released Wednesday.
The report, “Early warning signs for the DC region’s economy amid federal downsizing,” identifies Alexandria alongside Arlington County, Fairfax County, and Loudoun County as jurisdictions where unemployment has risen most sharply. The pattern reflects that while higher concentrations of federal jobs are located in Washington, D.C., the vast majority of the region’s federal workers live in Virginia and Maryland suburbs, according to the researchers.
More than 13,000 federal workers call Alexandria home, according to WTOP. In contrast, over 76,000 federal employees live in Virginia’s 8th Congressional District, which includes Arlington, Alexandria, Falls Church and parts of Fairfax County, according to Rep. Don Beyer’s website, who represents the district.
Since January, the Washington metro region has shed federal jobs at a faster rate than the nation — losing 4.5% of federal positions compared with 2.5% nationwide, the Brookings report found. The Trump administration has laid off approximately 300,000 federal workers, terminated over 13,000 contracts and 15,000 grants, and reduced federal office space as part of what researchers call the most significant government downsizing in modern history.
The region’s unemployment rate has increased early nine times that of the nation, with suburban workers seeing the largest increases, the report states. The Brookings analysis found Alexandria’s unemployment increased by 0.6 percentage points, though city data shows a steeper rise. Nationally, unemployment rose to 4.4% as of June 2025 from 3.6% in June 2023.
City data presented Sept. 9 showed Alexandria’s unemployment rate at 3.6% in 2025, compared with 2.5% in 2024 — a 1.1 percentage point increase that exceeds the Brookings figure. Total employment in Alexandria held steady at just over 80,000 in the first quarter of 2025, similar to 2024 levels.
City Manager Jim Parajon cautioned during the Sept. 9 presentation to Alexandria City Council that local unemployment figures “really don’t reflect the early buyouts, administrative leave and the federal layoffs that are not fully reflected in the unemployment data yet.”
The Brookings report found that homes for sale in the Washington region increased 64% since last June — far surpassing the rate of change nationally and in other major metro areas. Alexandria city data from September showed active home listings surged 44% year-over-year to 308 properties as of July.
“I do worry that might be a sign of the sort of federal government cuts causing people to feel they need to leave the city,” Vice Mayor Sarah Bagley said during the September council meeting where housing data was presented.
Despite the surge in listings, other Alexandria housing indicators from the September report showed strength. Median sales prices rose 5.38% year-over-year, and homes averaged just 23 days on the market with 44% selling within 10 days. However, the total number of sales dropped to 174 from 183 the previous year.
While the broader Washington region added about 21,000 private sector jobs since January, the Brookings researchers found these gains insufficient to offset federal losses and concentrated in industries misaligned with displaced federal workers’ skills. Nearly 45% of new private jobs were in construction, with additional growth in hospitality and health care — sectors with historically low occupational overlap with government work, according to the report.
The report found that venture capital flows into the Washington region have slowed dramatically since January 2025, falling more than 30%, while continuing to grow nationally.
Alexandria’s retail sector has provided strength amid broader economic headwinds, according to the September city data. Old Town’s retail vacancy rate held at 5.8%, significantly better than Washington, D.C.’s 12.3% rate, while Del Ray recorded a 6.3% increase in foot traffic year-over-year.
However, Alexandria’s office market showed stress in the September report. Commercial vacancy rates climbed to 21.6% in 2025 from 15% in 2023, with much of the increase attributed to two buildings at the Patent and Trademark Office campus returning to the market, representing at least 600,000 square feet of space.
The Brookings report warns that additional disruption may lie ahead, with a Sept. 30 deadline approaching when most deferred federal resignations take effect, potentially accelerating job losses. The researchers found troubling signs of household financial distress regionwide, with more residents showing severely constrained credit and the Capital Area Food Bank reporting worsening food insecurity.
“Uncertainty continues at the national level,” Parajon told council members in September. “Anytime there’s uncertainty, there’s a question of whether you should invest or not invest, whether you should buy or sell, whether you should move or stay.”
Alexandria officials said in September they are working to move beyond tracking economic indicators to developing proactive responses. Councilman John Chapman urged action during the September meeting, saying “information rings hollow if we are not bringing forward opportunities to shift the information, particularly to our benefit.”
The city has invested $18.02 million in infrastructure projects from 2022 through the first quarter of 2025, completing 37 projects, with plans for an additional $11.3 million across seven projects in 2026 and 2027, according to the September presentation. Parajon committed to continuing monthly economic updates, with October focusing on visitor activity and tourism impacts.
“The future health and vitality of America’s capital region is uncertain,” the Brookings report concludes. “What is certain is that federal, state, and local leaders as well as the regional civic community have the chance to work together to shape its destiny.”
