In January 2024, the D.C. Policy Center’s Rivlin Initiative launched its Quarterly Business Sentiments Survey. The survey provides real-time insights into the experiences of the D.C. region’s business community for the public, media, and local policymakers.[1]
Each round, survey participants are asked about their six-month expectations for the District’s economy. Respondents have five answer choices: “much stronger,” “somewhat stronger,” “minimal or no change,” “somewhat weaker,” and “much weaker.”
In the last two rounds of the survey—2025 Q2 and 2025 Q3—six-month expectations about the District’s economy shifted dramatically. Respondents became much less optimistic, with only 9 percent and 14 percent, respectively, expecting the District’s economy to strengthen over the next six months. These figures stand in contrast to the previous three rounds, when at least 20 percent of respondents expected the District’s economy to strengthen.[2]
Why the shift in respondents’ six-month economic expectations? Two federal policies–higher tariffs and cuts to the federal workforce–have likely undergirded the shift. Economists believe that the higher tariffs will negatively affect both businesses and consumers. Businesses will likely confront supply chain disruptions, while consumers will likely encounter higher prices. Meanwhile, the cuts to the federal workforce will destabilize a key sector of the District’s economy. The District’s Chief Financial Officer estimates the District will lose 40,000 federal government jobs over the next four years.
All in all, higher tariffs and cuts to the federal workforce have likely driven the recent erosion in optimism about the District’s economy.
[1] The survey data presented here should be viewed as suggestive anecdotal evidence. Each round involved a different sample, though some respondents participated in multiple rounds. Additionally, all rounds are subject to common survey limitations, such as non-response bias. For more details on the methodology of any specific round, see, for instance, the results of Round 2 of 2025. Previous survey results can be found here.
[2] A similar pattern can be seen in the share of respondents who expected “minimal or no change.” Before 2025 Q2 and 2025 Q3, the share of respondents who expected minimal or no change ranged between 30 and 36 percent and then dropped substantially.