I am experimenting with GitHub Codespaces, trying to spin up an app using Node and Postgres.
I selected the following option:

which produced the following devcontainer.json:
// Update the VARIANT arg in docker-compose.yml to pick a Node.js version: 10, 12, 14 
{
    "name": "Node.js & PostgreSQL",
    "dockerComposeFile": "docker-compose.yml",
    "service": "app",
    "workspaceFolder": "/workspace",
    // Set *default* container specific settings.json values on container create.
    "settings": { 
        "terminal.integrated.shell.linux": "/bin/bash",
        "sqltools.connections": [{
            "name": "Container database",
            "driver": "PostgreSQL",
            "previewLimit": 50,
            "server": "localhost",
            "port": 5432,
            "database": "postgres",
            "username": "postgres",
            "password": "postgres"
        }]
    },
    // Add the IDs of extensions you want installed when the container is created.
    "extensions": [
        "dbaeumer.vscode-eslint",
        "mtxr.sqltools",
        "mtxr.sqltools-driver-pg"
    ]
    // Use 'forwardPorts' to make a list of ports inside the container available locally.
    // "forwardPorts": [3000, 5432],
    // Use 'postCreateCommand' to run commands after the container is created.
    // "postCreateCommand": "yarn install",
    // Uncomment to connect as a non-root user. See https://aka.ms/vscode-remote/containers/non-root.
    // "remoteUser": "node"
}
and docker-compose.yml:
version: '3'
services:
  app:
    build: 
      context: .
      dockerfile: Dockerfile
      args:
        # [Choice] Node.js version: 14, 12, 10
        VARIANT: 14
        # On Linux, you may need to update USER_UID and USER_GID below if not your local UID is not 1000.
        USER_UID: 1000
        USER_GID: 1000
    volumes:
      - ..:/workspace:cached
      
    # Overrides default command so things don't shut down after the process ends.
    command: sleep infinity
    # Runs app on the same network as the database container, allows "forwardPorts" in devcontainer.json function.
    network_mode: service:db
    # Uncomment the next line to use a non-root user for all processes.
    # user: node
    # Use "forwardPorts" in **devcontainer.json** to forward an app port locally. 
    # (Adding the "ports" property to this file will not forward from a Codespace.)
  db:
    image: postgres:latest
    restart: unless-stopped
    volumes:
      - postgres-data:/var/lib/postgresql/data
    environment:
      POSTGRES_PASSWORD: postgres
      POSTGRES_USER: postgres
      POSTGRES_DB: postgres
    # Add "forwardPorts": ["5432"] to **devcontainer.json** to forward MongoDB locally.
    # (Adding the "ports" property to this file will not forward from a Codespace.)
volumes:
  postgres-data:
My package.json is as follows:
{
  "dependencies": {
    "pg": "^8.4.2"
  },
  "scripts": {
    "start": "node index.js"
  }
}
and my index.js is like so:
const { Pool } = require("pg")
const db = new Pool()
db.query(`CREATE TABLE IF NOT EXISTS testing(id SERIAL PRIMARY KEY);`)
Running yarn start produces the following error:
codespace ➜ ~/workspace/codespace-demo (main ✗) $ yarn start
yarn run v1.17.3
warning package.json: No license field
$ node index.js
(node:1037) UnhandledPromiseRejectionWarning: Error: connect ECONNREFUSED 127.0.0.1:5432
    at TCPConnectWrap.afterConnect [as oncomplete] (net.js:1141:16)
(node:1037) UnhandledPromiseRejectionWarning: Unhandled promise rejection. This error originated either by throwing inside of an async function without a catch block, or by rejecting a promise which was not handled with .catch(). To terminate the node process on unhandled promise rejection, use the CLI flag `--unhandled-rejections=strict` (see https://nodejs.org/api/cli.html#cli_unhandled_rejections_mode). (rejection id: 1)
(node:1037) [DEP0018] DeprecationWarning: Unhandled promise rejections are deprecated. In the future, promise rejections that are not handled will terminate the Node.js process with a non-zero exit code.
Done in 0.11s.
Which leads me to believe the Postgres instance is not up and running inside the Codespace.
I tried uncommenting this line about forwarding ports:
"forwardPorts": [3000, 5432]
but no luck there.
I am probably missing some insight about how the Docker pieces fit in to play here, but would love it if someone could point me in the right direction!
I was able to get this working with two points.
It's not enough to simply add a .devcontainer with the files inside.  You need to commit the changes, push them, delete the codespace and then make a new one for the changes to reflect.
Inside of .devcontainer/docker-compose.yml, I had add the line network_mode: host to the db service.  According to this thread, this requirement will be removed soon, but for now it is required: https://github.community/t/cant-connect-to-postgres/142655/2?u=andyweiss1982
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