Government now makes up 30.8% of D.C.'s real economy, down from 37.4%

Government still makes up a large part of the District's economy, but that part is getting smaller. In 2001, government accounted for 37.4% of the District's real gross domestic product. By 2024, the latest year available, its share was 30.8%.

The drop does not mean government output shrank. Adjusted for inflation, government output in the District rose 23.6% from 2001 to 2023. Private service businesses grew much faster, rising 66.5% over the same years.

Federal workforce and contracting cuts have put the District's reliance on government under a spotlight. The newest GDP figures for the District, which run through 2024, show residents and workers how much of the local economy rests on government and how much rests on private services.

A smaller slice of a bigger economy

The District's total real GDP rose 48.9% from 2001 to 2023. Government grew more slowly than the economy as a whole, so its slice of the total got smaller.

From 2001 to 2023, government's share fell 6.3 percentage points, from 37.4% to 31.1%. Private services-providing industries moved the other way. Their share rose from 60.6% to 67.8%.

Another way to see the gap is to set each sector's 2001 output as the base year and track it from there. By 2024, real government output stood at 124 index, 2001=100. Real private services output stood at 169 index, 2001=100.

Measured as shares of the whole economy, the same trend shows government's slice narrowing over the period while private services widened.

What the latest year shows

In 2024, the District's total real GDP was 145,087,985 thousands of chained 2017 dollars. Real government output accounted for 44,736,489 thousands of chained 2017 dollars of that total.

Government output rose 0.5% from 2023 to 2024. That is the newest figure in the series, and it is subject to revision. Government's share slipped to 30.8%, from 31.1% the year before.

Put simply, government output was still growing in 2024. The small drop in its share suggests the rest of the District's economy grew a bit faster that year.

Why the mix shifted, and what comes next

The GDP data show what changed, not why. Earlier research by the District's Office of Revenue Analysis, part of the Office of the Chief Financial Officer, offers some context.

Looking at a longer stretch, the office found that the District lost federal jobs while the private sector added far more (ora-cfo.dc.gov). The office also reported that the federal share of total wages earned in the District fell (ora-cfo.dc.gov).

But federal money did not stand apart from private growth. The office found that from 2000 to 2014, federal purchases went up sharply (ora-cfo.dc.gov). These figures alone cannot show how much private growth rested on federal spending.

Federal activity has also cushioned the District in hard times. The office wrote that increases in federal employment and earnings were important for the District's recovery from the 1990 recession and from the 9/11 attacks and recession in 2001 (ora-cfo.dc.gov).

That history matters now. The CFO's office projected that federal employment in the District would decline sharply by the end of its financial plan period (ora-cfo).

The office revised its revenue forecast downward, largely due to expected sharp declines in employment as the federal government reduces its workforce (ora-cfo). It also expected job losses in federal contracting, hospitality and transportation, as reduced federal employment lowers demand in those sectors (ora-cfo).

That last forecast matters for reading the GDP trend. In the CFO's view, private industries such as contracting, hospitality and transportation are not insulated from federal cuts (ora-cfo). A shrinking government share on paper does not mean the private side stands on its own.

For people who work in the District, the takeaway is mixed. Private services now carry a bigger share of the District's output than they did in 2001. Yet government output was still rising through 2024, and some private industries lean on federal demand.

The District's GDP figures stop in 2024, so they do not yet capture the federal workforce reductions the CFO's office was forecasting. Releases covering 2025 and later years will show whether government output itself turns down, not just its share.

Watch, too, whether private services keep growing if federal contracting slows. Revisions to the 2024 numbers could also shift the latest picture.

How we did this

We used federal estimates of real GDP for the District from the Bureau of Economic Analysis, in chained 2017 dollars, for 2001 through 2024. We compared inflation-adjusted growth in government and private services-providing output, built indexes with 2001 as the base year, and calculated each sector's share of total real GDP as a ratio of chained-dollar values. Context on causes comes from published analyses by the District's Office of Revenue Analysis and the Office of the Chief Financial Officer.

Real GDP: The value of goods and services produced in an area, adjusted to remove the effects of inflation so years can be compared. Chained dollars: A method the federal government uses to adjust output for price changes, expressed here in 2017 dollars. Sector values in chained dollars do not add up exactly to the total. Government output: The value added by government activity in the District. Private services-providing industries: Private businesses that sell services rather than goods. Percentage points: The simple difference between one percentage and another, as opposed to the percent change between them. Index (2001 base year): A way to track growth by setting each sector's 2001 output as the starting point and showing later years relative to it.

Limitations

• The 2024 figures are the newest available and are subject to revision, so the latest-year change and share could shift.
• Shares calculated from chained dollars are approximations. Sector shares do not add up exactly to the total, so they should be read as rough measures of the mix.
• The data end in 2024 and do not reflect federal workforce and contracting cuts that came after.
• GDP measures output produced inside the District, not the jobs or incomes of District residents.
• These figures cover government output as a whole; this analysis does not break out federal activity alone.
• The Office of Revenue Analysis research cited here covers earlier and different time periods and measures jobs, wages and purchases rather than GDP.
• The data show how the economy's mix changed, not why. Explanations come from the cited District analyses, not from the GDP figures themselves.

Sources

• Federal Reserve Bank of St. Louis (FRED): Real Gross Domestic Product: Government and Government Enterprises in District of Columbia County, DC, latest period 2024, released Feb. 5, 2026; retrieved Oct. 13, 2026. Data
• Federal Reserve Bank of St. Louis (FRED): Real Gross Domestic Product: Private Services-Providing Industries in District of Columbia County, DC, latest period 2024, released Feb. 5, 2026; retrieved Oct. 13, 2026. Data
• Federal Reserve Bank of St. Louis (FRED): Real Gross Domestic Product: All Industries in District of Columbia County, DC, latest period 2024, released Feb. 5, 2026; retrieved Oct. 13, 2026. Data