A leading economist is warning that Maryland is among nearly two dozen states in recession or on the brink of it.

And Montgomery County — home to more federal workers than any other county in the state — could be the epicenter of economic contraction in Maryland. Economists at Moody’s Analytics found that the D.C. suburb plays an outsize role in driving the state toward potential recession.

Local officials, meanwhile, contend that Montgomery County’s large population of wealthy residents may help it withstand broader economic peril in the region, which has arisen in large part from the federal government’s reduction in force under President Donald Trump.

Montgomery County is in the middle of a region that one prominent economist highlighted as an area of particular concern as the broader U.S. economy, in his estimation, teeters on the edge of recession.

Mark Zandi, chief economist for Moody’s Analytics and an economic adviser to Maryland lawmakers and officials, claimed in a recent analysis that 21 states and Washington, D.C., are either in or at high risk of recession.

The states are spread across the country, but the local economies in the capital region stood out to him because of government job cuts under Trump.

Adam Kamins, senior director of economic research at Moody’s, said in a recent email that most of Maryland’s key economies outside Baltimore were causing concern to analysts. Moody’s analysts identified months ago that Montgomery County and Frederick County have a heightened risk of recession.

Compared to Prince George’s County, which has the second-highest concentration of federal workers in Maryland, Montgomery County has presented greater cause for concern in part because of its high number of federal agencies and offices, Kamins said.

The National Institutes of Health is headquartered in Bethesda, and a host of agencies have a presence in the county, including the Food and Drug Administration, the Department of Health and Human Services, the Department of Defense and the National Oceanic and Atmospheric Administration.

Daraius Irani, chief economist for the Regional Economic Studies Institute at Towson University, said there are signs that Maryland is “more likely” to tip into a recession than it normally would be, though he said he wouldn’t classify the state as high risk.

“There is a potential,” he said, considering cuts to the federal workforce, cuts to institutions of higher education, cuts to the National Institutes of Health, drops in tourism, including from other countries, and slowdowns in trade impacting work at the Port of Baltimore.

Irani said Montgomery and Prince George’s counties can be seen as canaries in the coal mine of Maryland’s economic prospects, considering the number of federal workers living in each.

Irani also took a different view than Kamins of what may be ahead for Prince George’s County.

Prince George’s, he said, may be hit harder financially than Montgomery County, which will benefit from its wealthy tax base and footprint in the defense and homeland security fields, where the Trump administration has increased spending.

Warnings of a Maryland recession began in March, shortly after Moody’s labeled Maryland the state with the most direct exposure to the recent federal job cuts.

From January to July, Maryland experienced the largest federal workforce decline in the nation, losing 12,400 jobs, according to the state Department of Labor.

An area comprising Gaithersburg, Bethesda and Frederick experienced the greatest loss of federal jobs in the state over that span, and the problem has appeared to persist. Montgomery County had the highest number of federal worker unemployment insurance claims in the state for most of August and in the first week of September.

The Trump administration’s firings and buyout offers have resulted in the greatest loss of federal workers in Maryland since the 2013 federal budget sequestration, in which there were across-the-board cuts to federal agencies.

Nearly 8,000 federal workers in the state lost their jobs from December 2012 to September 2014, according to the comptroller’s office.

Richard Madaleno, the county’s chief administrative officer, contends that the relatively recent surge of wealth in Montgomery County could be a stabilizing force at this time of deep uncertainty.

From 2001 to 2023, the number of county residents with more than $200,000 in taxable income increased nearly fourfold, according to data from the state comptroller’s office.

While the county comprises about 17% of the state’s population, in 2023 it was home to 29% of filers with at least $200,000 in taxable income and 39% of those reporting at least $500,000.

“Their income is not tied to what’s happening in the federal government,” Madaleno said. “They, in fact, are making more money than ever before. And that’s flowing into the state of Maryland and into Montgomery County.”

Even so, county leaders are bracing for more uncertainty.

County Executive Marc Elrich has been warning about the potential for 20,000 to 40,000 more job cuts with the start of the federal fiscal year in October. And the potential loss of taxable income is sure to be a conversation point as he tours the county to solicit feedback about his plans for next year’s budget.

County staff members have recently helped former federal workers with job referrals, hosted résumé writing workshops and worked with the school system to attract the unemployed to teaching positions.

There’s also a one-stop website for the federal workforce seeking local resources called Mobilize Montgomery.

But, Elrich said, the county’s ability to meaningfully support federal workers locally is “really limited.” He estimated there were fewer than 200 vacancies when Montgomery County rolled out a program to connect laid-off workers to county jobs. .

“The magnitude of the job losses dwarf the job vacancies in the county,” he said.

State and local officials have shared their pessimism about the Maryland economy in their budgetary and policy decisions, Michael Sanderson, executive director of the Maryland Association of Counties, said in a recent phone interview.

But for now, an analysis showing Maryland and the national capital region are at a heightened risk of recession may not dramatically change how local officials approach their planning for the coming months and the next fiscal year.

They’ve known for months that Maryland is uniquely exposed.

“We know that we’re kind of the tail,” Sanderson said, “and we’ll see whether the dog is gonna wag us.”