A new report shows how President Donald Trump’s administration is harming state economies nationwide as several states that rely on federal government jobs and spending landed on a list of the top 10 worst economies in the nation.
And the Trump administration’s sweeping cuts to the federal workforce are continuing to acutely impact the Washington, D.C., Maryland, Virginia region.
Maryland has the second worst economy in America behind Rhode Island, coming in at 49th out of 50, according to an annual CNBC report measuring the best and worst states for business. It’s a big dropoff and the worst-ever showing for the state since CNBC began its tracking in 2007. The report uses federal government data sources from institutions like the Bureau of Economic Analysis and the Bureau of Labor Statistics, along with private company data, to track various measures of business friendliness. States are ranked for things like workforce, overall economy, cost of living, infrastructure and quality of life. Maryland was 25th in 2025, hovered between 30th and 31st place between 2022 and 2024, and saw a five-year economic ranking high of 20th place in 2021.
“Economic growth and job growth nearly flatlined in Maryland over the past year,” the CNBC report wrote, adding that the state’s “deep connection with the federal government next door has a lot to do with that.”
In total, Marylanders lost 29,200 federal jobs between January 2025 and April 2026, according to an analysis by Brookings, an independent, D.C.-based research institution. That’s an 18% decrease in federal employment in the state, and about 9% of the total 335,000 federal jobs lost between all 50 states under the Trump administration and its Department of Government Efficiency, or DOGE.
The state’s unemployment rate spiked to 4.4% in May, up from 4% the same time last year, and from 3% in January 2025, according to data from the BLS and the state.
And it’s not just jobs and the hit to workers’ direct income that’s tanking economies nationwide. Several of the top 10 worst state economies have budgets that are heavily reliant on federal government funding, meaning cuts to federal spending nationally have shown up at the state and local levels. Maryland has a disproportionately high share of federal workers, but a relatively average percentage of the state’s budget comes from federal spending. Other states on the list of top 10 worst economies owe far greater proportions of their state budgets to the federal government.
Oklahoma has the 10th worst economy and relies on the feds for more than 40% of state spending, CNBC reported. Alaska has the seventh worst economy and owes 45% of its state spending to the federal government, while the state with the fourth worst economy, Louisiana, relies on the feds for more than 48% of its state spending.
CNBC’s best states for business ranking uses economic rankings as one part of its overall rating of a state’s business environment. For that part, Maryland fared a bit better, coming in at 36th overall. Its southern neighbor, Virginia, has long been among the top best states for business and was named third best for 2026. The Trump effect is still being felt there, though. In 2025, Virginia fell out of the top three for the first time since 2018, CNBC reported. Its economy ranked 23rd this year, down from 14th the year before and 11th in 2024.
The business news agency’s annual rankings join a mounting number of sources reflecting the cataclysmic, concentrated effect of Trump on the DMV economy. Last June, a survey of DMV-area realtors found that 40% reported having transactions affected by federal job cuts. In March, one year after Trump’s billionaire tech ally Elon Musk took the helm at DOGE, dismantled independent agencies, and enacted devastating, AI-driven cuts to fed jobs and government spending, realtors told TPM the middle class was being locked out of housing opportunities in the nearby D.C. area.