Maryland’s job market kept slowly recovering in the second quarter of 2026, but the state remains roughly 26,500 jobs short of where it stood a year earlier, according to the second edition of Comptroller Brooke Lierman’s quarterly economic snapshot.
Total employment grew by 8,900 jobs in the second quarter, an improvement over the first quarter’s 6,800-job gain, with growth concentrated in health care and social assistance, accommodation and food services, and education. But that growth is still catching up from a much larger hole: employment remains about 1% below where it stood in the second quarter of 2025, a gap Lierman’s office attributes primarily to federal government job cuts over the past year and a half.
Those cuts have been substantial. Independent tracking by the Brookings Institution shows Maryland lost roughly 29,300 federal government jobs between January 2025 and March 2026 — an 18% drop in all federal positions located in the state, and the largest federal job loss of any state except California. The cuts hit Maryland especially hard because of how the state’s economy is built: federal jobs make up only about 6% of Maryland’s overall employment, but 10% of its total wages, since federal positions have historically paid well above the state average. Brookings describes Maryland’s economy as long powered by “ed, meds, and feds” — education, health care, and federal employment — meaning cuts concentrated in one of those three pillars ripple further than they might elsewhere.
The state’s unemployment rate, now at 4.3% and marginally above the national rate, reflects that longer arc rather than a new development this quarter. The rate has held at roughly that level since climbing from 3.6% in February 2025, with the steepest single-month federal job loss — about 9,700 positions in October 2025 alone — tied partly to federal workers who had taken a deferred-resignation buyout rolling off the payroll that month.
Federal employment itself ticked up modestly in the second quarter, adding 500 jobs from the first quarter — a small sign of stabilization after the sharpest cuts, though nowhere near enough to close the year-over-year gap. The federal government remains an outsized presence in Maryland’s economy regardless of the cuts, still directing roughly $150 billion annually into the state through wages, retirement income, contracts, and grants, according to a 2025 report from the Comptroller’s office and the University of Maryland’s Smith School of Business.
Elsewhere in the snapshot, the picture was more stable. Maryland’s average home price held flat at $433,000 for the second straight quarter, and the state’s GDP rose 8% from the first quarter of 2025 to the first quarter of 2026, continuing the growth trend the Comptroller’s first-quarter release had already identified.
Lierman’s office said the quarterly snapshot will continue to be updated each quarter, tracking employment, cost of living, housing, business growth, and state revenue trends going forward. The full dashboard is available at dashboards.marylandtaxes.gov.
