Virginia’s job market displayed contrasting trends in August, with a notable addition of 7,200 jobs while the unemployment rate remained unchanged at 3.6%. This marks the first month in eight where the state’s jobless rate did not experience an increase. Governor Glenn Youngkin, who will conclude his term in January, highlighted the job gains as a testament to his administration’s economic policies, noting that Virginia has added 277,000 jobs since his inauguration in January 2022.
The data revealed a slight decline in the labor participation rate, down by 0.1 percentage points, indicating that an additional 5,081 individuals are either unemployed or have exited the workforce since July. Over the past year, Virginia’s labor force has contracted by 40,940 people. According to Bob McNab, chairman of the economics department at Old Dominion University, if those who left the workforce were counted as unemployed, the rate would have increased.
The discrepancy arises from the use of two distinct surveys: one assessing household employment and another tracking business job numbers. McNab stated, “The numbers tell you both things can be correct. There can be plenty of jobs open and also the number of people at work or looking for work has declined in Virginia.”
Youngkin’s administration emphasized that Virginia’s unemployment rate remains 0.7 percentage points lower than the national average, which rose to 4.3% last month. Notably, Virginia’s unemployment rate has increased by 0.7 percentage points over the past year, with only Indiana and Oregon experiencing similar rises. The District of Columbia recorded the highest unemployment rate at 6%, also reflecting a 0.7 percentage point increase.
Political implications of the job statistics have surfaced as well, with various interpretations regarding economic conditions under former President Donald Trump, who began his term on January 20, and Youngkin, a Republican ally often mentioned as a potential candidate for the 2028 presidential election.
In a related development, John Reid, the GOP nominee for lieutenant governor, unveiled a plan aimed at providing job opportunities for the many federal workers in Virginia who lost their positions due to federal workforce reductions initiated under the DOGE.
Youngkin has stressed the importance of the job creation numbers linked to economic development initiatives during his term. He pointed out that Virginia boasts over 200,000 open jobs, asserting that the state remains a prime location for both businesses and individuals.
The job market situation has become a crucial topic in the upcoming gubernatorial campaign. Democratic candidate Abigail Spanberger has called on the Youngkin administration to take more decisive actions to assist Virginians affected by job losses attributed to federal policies. In contrast, Lieutenant Governor Winsome Earle-Sears has commended Youngkin’s successes in enhancing job opportunities within the private sector.
According to the U.S. Bureau of Labor Statistics, Virginia witnessed a loss of 1,800 federal jobs from the previous month and 8,700 jobs year-over-year. There was also a decrease of 1,900 jobs in professional and business services, a category critical for high-wage positions tied to federal contracts, alongside a loss of 100 manufacturing jobs from July to August.
In contrast, the education and health services sector experienced significant growth, adding 4,600 jobs month-over-month and 27,600 jobs compared to last year. Gains were also observed in construction, services, and goods production.
State officials are awaiting the conclusion of the federal fiscal year on September 30 to fully assess the impact of workforce cuts stemming from the DOGE. Many deferred resignations from federal employees who accepted buyout offers earlier this year have yet to be reflected in state unemployment claims. Virginia Secretary of Labor Bryan Slater reported that approximately 1,700 affected federal employees have applied for unemployment insurance in Virginia, with additional claims from other regions, including 5,000 claims in Washington D.C. and 3,000 in Maryland.
As the situation develops, Slater noted that claims from private contractors are also on the rise, with about 5,900 claims filed by workers from the top 500 companies engaged with the federal government. The full repercussions of the workforce reductions will be clearer after the end of this month.
