Washington, D.C. has a growing, diversified economy with an increasing percentage of professional and business service jobs. As of March 2008, the federal government accounted for about 27 percent of the jobs in Washington, D.C.'s nearly 700,000-strong workforce. Many other businesses such as law firms, independent contractors (both defense and civilian), numerous nonprofit organizations, lobbying firms, national associations of labor and professional groups, catering, and administrative services companies are directly or indirectly sustained by the federal government. It is thought that Washington is relatively immune to downturns in the national economy because the federal government, and those who work with it, continue operations even during economic recessions.

The city also serves as an economic anchor to the metropolitan area. Many of the jobs in D.C. are filled by commuters from the Maryland and Virginia suburbs, thereby contributing to the economic growth of both states. Further, the presence of many major government agencies outside of the District, including the Department of Defense, National Institutes of Health, and the Food and Drug Administration, has led to additional economic development in the D.C. area. As of March 2008, the Washington Metropolitan Area had an unemployment rate of 3.4 percent; the lowest rate among the 40 largest metro areas in the nation. It is also significantly lower than the national average unemployment rate of 5.2 percent.

Washington also has growing industry unrelated to government, especially in the areas of education, finance and scientific research. The George Washington University, Georgetown University, Washington Hospital Center, Howard University, and Fannie Mae are the top five non-government-related employers in the city. There are also five Fortune 1000 companies based in Washington (two of which are also Fortune 500 companies). The city has also become a leader in global real estate investment, behind London, New York City, and Paris. In 2006, Expansion Magazine ranked D.C. among the top 10 metropolitan areas in the nation for climates favorable to business expansion. Washington, D.C. also has the 3rd largest downtown in the United States in terms of commercial office space, directly behind New York City and Chicago.

Gentrification efforts are also taking hold in Washington, D.C., reviving once-decaying neighborhoods into thriving urban centers. Most notable are the changes made in the U Street Corridor, Logan Circle, the 14th Street Corridor, Shaw, and Columbia Heights. A new shopping mall opened in Columbia Heights in March 2008 represents the first new major retail center in the District in 40 years. The gross state product of the District in 2006 was $87.664 billion, ranking at number 35 when compared with the fifty states. The District also had an unemployment rate of 6.2 percent as of March 2008; however, that rate fluctuates greatly within the city from 1.5 percent in affluent Ward 4, to 16.3 percent in Ward 8 (see above).