Virginia has lost 22,400 federal government jobs since the end of last year, but the state’s unemployment rate held steady at 3.5% in November after rising for seven consecutive months earlier last year.
The U.S. Bureau of Labor Statistics, still recovering from the 43-day federal government shutdown, reported Wednesday that Virginia’s jobless rate remained at the same level as in September, but the state’s labor participation rate fell by 0.3% to 64.3% as the labor pool continued to shrink.
The state unemployment rate has risen by 0.6% since the previous November, making Virginia one of 25 states (including the District of Columbia) with statistically significant increases in unemployment over the 12-month period. The unemployment rate had risen from 2.9% in December 2024 to 3.6% in July before declining slightly in September.
“Honestly, it could be better, but it could be a whole, whole lot worse,” Secretary of Labor Bryan Slater said Monday.
Virginia’s unemployment rate declined in September for the first time this year, but the state also lost jobs and the labor force shrank as the economy continued to show strain.
The good news is that the state unemployment rate remains 1.1% below the federal rate, which rose to 4.6% in November. The state added 8,600 jobs from the previous month, most of them in private sector industries. The state lost just 200 federal jobs from October to November, which were more than offset by gains in local government workers.
“Though delayed, the November jobs report includes an anticipated shift from government-focused employment to the Commonwealth’s robust and growing private sector,” Gov. Glenn Youngkin said Wednesday.
The reports reflect the results of two surveys: one of households to measure unemployment and the labor force, and another of business establishments to measure jobs.
Virginia policymakers have been concerned about the effects on the state economy from cuts in the federal government workforce and spending since President Donald Trump took office, especially after thousands of employees accepted buyout offers from the new administration and left the payroll Sept. 30.
Terry Clower, director of the Center for Regional Analysis at George Mason University, estimates that the Washington, D.C., area, including Northern Virginia, has lost 53,000 federal jobs and about 17,000 professional and technical services jobs, which include federal contractors. He said the Maryland suburbs were hit the hardest.
“That federal number, it’s just ugly,” Clower said.
On the unemployment side, he’s not sure the new numbers reflect what he sees happening in communities.
“It’s not that I think the numbers are wrong,” Clower said. “I’m just not sure our unemployment numbers right now are reflecting the reality on the ground.”
Virginia Works, the state’s workforce development agency, reported Wednesday that the state lost 22,400 federal jobs in November compared to the same month a year earlier. Those losses were partly offset by gains in local and state government jobs, resulting in a net decline of 8,000 workers, a 1.1% drop.
The state gained 16,400 private jobs over the same 12-month period, primarily in education and health services, private service providers and construction. In addition to the government sector, Virginia lost jobs in leisure and hospitality, manufacturing and professional and business services.
Virginia relies on income taxes from employees in professional and business services for much of its revenues, but the decline hasn’t shown up in recent monthly revenue reports.
In a separate report on Tuesday, the Bureau of Labor Statistics reported that job openings in Virginia had increased to 255,000, a gain of 23,000 openings.
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