Eye on the Economy: A Look at Maryland and the Regional Economy in February 2026

• The most recent job report updates reveal that between January 2026 and February 2026, Maryland lost 5,500 Total Nonfarm jobs.
• Between January 2025 and February 2026, Maryland lost 50,500 Total Nonfarm jobs.
• The official unemployment rate for Maryland remained unchanged at 4.3 percent.

According to the most recent report from the Bureau of Labor Statistics (BLS), Maryland lost 5,500 Total Nonfarm jobs between January 2026 and February 2026. (Due to the government shutdown in late 2025, BLS statistics are delayed from their usual reporting schedule.) This was a result of a loss of 6,100 Total Private jobs, offset by a slight increase of 600 Total Government jobs. Maryland’s unemployment rate remained steady at 4.3 percent, despite a month-over-month decline in employment.

Although early 2026 showed overall job gains, more recent data indicate declines, and the net change since the beginning of 2025 was notably less positive. Between January 2025 and February 2026, Maryland lost a total of 50,500 Total Nonfarm jobs, equal to 1.8 percent of the Total Nonfarm jobs that existed in January 2025. The losses were split between 29,200 Total Private jobs and 21,300 Total Government jobs, with the loss of Total Government jobs equal to 3.9 percent of the jobs that existed in January 2025. Maryland’s unemployment rate increased from 3.5 percent to 4.3 percent over the same period.

At 4.3 percent, Maryland’s unemployment rate ranks near the middle among U.S. states, tying for the 28^th lowest nationwide. However, Maryland ranked amongst states with the largest increase in the unemployment rate from February 2025 to February 2026, with an over-the-year change of 0.7 percent. This places Maryland in a tie for 43^rd among all states when comparing the best year-to-year change.

As 2025 concluded, year-over-year employment in Maryland’s total Nonfarm sector declined, with the most severe losses concentrated in Federal employment. Between January 2025 and January 2026, Maryland recorded a record loss of 31,100 federal civilian jobs. Nationally, the federal workforce continued to contract, losing 274,000 jobs in 2025, the largest single-year decline since 1946. Maryland experienced one of the steepest state-level declines, followed by California (-30,300), District of Columbia (-26,000), and Virginia (-26,000).

Initial Federal Unemployment Insurance Claims (UCFE)  in Maryland remained elevated throughout 2025 following the start of the Trump-Vance administration, though claims subsided after peaking during the federal shutdown in October. Data from the Maryland Department of Labor indicates that between January 19, 2025, to January 17, 2026, the state received 10,300 federal claims. The week ending April 11^th, the state received 32 initial UCFE claims and 597 continuing claims, levels that remain above historical norms. By comparison, in 2024, initial UCFE claims averaged just 11 per week, while continuing claims averaged 122 claims per week, underscoring the substantial surge observed in 2025. These trends reflect ongoing unemployment pressures stemming from federal workforce reductions.

A recent analysis by the Comptroller of Maryland highlights potential impacts on state spending and employment resulting from actions at federal agencies, including workforce reductions at the U.S. Department of Health and Human Services (HHS) and the dismantling of agencies such as the U.S. Agency for International Development (USAID). These agencies have historically contributed to substantial spending and employment activity within Maryland.

Beyond concerns about consumer spending, the state recently shifted part of the financial burdens of a looming budget deficit. Earlier this month,  Governor Moore signed a $70.8 billion operating budget for fiscal year 2027 into law. The budget closed a projected $1.4 billion deficit through $1.8 billion in program cuts and fund transfers. Although the enacted budget avoids tax increases for now, economist caution that residents may still feel the impact. Chief Economist Daraius Irani, warned that underlying problems are yet clear and warns that Marylanders may face unanticipated expenses and service cuts in FY 2027, noting that many of the state’s fiscal challenges are closely tied to its reliance on the federal government.

The Regional Economic Studies Institute (RESI) at Towson University will continue monitoring new federal and state policies and their potential impact on Maryland’s economy. With the situation evolving quickly, stay tuned for updates on employment trends across Maryland, the region, and the nation.