BLS: Federal Payroll Cuts Continued to Impact DC and MD in January

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The January 2026 State Employment Report from the US Bureau of Labor Statistics contained little in the way of meaningful content. According to the statistics released today, state labor markets remained stagnant in January. Payrolls were flat in the vast majority of states both on a m/m and y/y basis. Unemployment rates were largely unchanged m/m, but there was some notable movement y/y, with 14 states posting increases. The largest y/y u-rate increase was posted by Delaware, which saw its rate rise 1.3% to 5.4%. Indiana and Ohio saw their u-rates decline slightly. Monthly payroll gains were posted by California, Texas, Illinois, Indiana and Iowa, while DC saw a decline. Over the year, payrolls were up in California, Texas, South Carolina and Nevada, and down in DC and Maryland. Increases in health and education employment boosted most state numbers, but Texas, South Carolina and Nevada also saw gains from construction. DC and Maryland continued to suffer from the federal employment cuts as government and professional services employment shrank y/y. Virginia also saw a decrease in government employment, but this was offset by gains in other sectors, principally education and health services. 


Source: US Bureau of Labor Statistics

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