For the first time since 2008 Great Recession, Virginia’s unemployment rate has been increasing for the last five months, painting a mixed picture as the state has also been steadily adding jobs to the market over the past year.
Additionally, Governor Glenn Youngkin recently announced that Virginia has received $100 billion investment commitments.
In May, the unemployment rate in the state spiraled to 3.4%, U.S. Bureau of Labor Statistics data reveals.
The national average unemployment rate is 4.2% but Virginia’s current unemployment level is the highest since August 2021.
Virginia surpasses $100 billion mark in corporate investment commitments
Experts ascribe the loss of employment to a host of factors including manufacturing losses in rural areas and federal job losses under the Department of Government Efficiency drive to downsize the federal bureaucracy.
The state’s employment data indicates that Virginia produced nearly 50,000 additional nonfarm jobs over the past year. These include 41,700 jobs in the private sector.
The local government job and state employment opportunities also increased 9,900 and 2,700 respectively.
Along with D.C. and Maryland Virginia has a large number of federal employees. The state is said to have lost 4,900 federal jobs.
This week President Donald Trump’s administration announced relocation of the Department of Housing and Urban Development from D.C. to Alexandria in Virginia. The Department will be housed in National Science Foundation headquarters building. The move comes with the fact that 1,800 employees will be displaced.
Democratic lawmakers fault current government’s policies for the steady unemployment rates.
U.S. government statistics show Virginia’s unemployment rate has risen five months in a row, which hasn’t happened since 2008-09.
The unemployment rate is at its highest level since August 2021, easily the highest since Governor Youngkin took office. 1/https://t.co/uPZCLlMGCz
— Rep. Don Beyer (@RepDonBeyer) June 24, 2025
Some experts say the region seems to be passing through a kind of transition with both additions and losses of jobs.
It is still not fully clear where the job losses are happening.
Terry Clower at George Mason University told public service Radio IQ that while unemployment rate is partly linked to mass firings and termination of contracts in Washington, a lot of factors are still not known.
“The folks that were rather summarily dismissed for supposedly performance reasons that were probationary workers, many of those had their terminations put on hold as the cases are adjudicated,” Clower says.
“And then the second is the unknown number of people who are taking the voluntary separation package, the fork in the road people if you want to think of it that way,” the expert noted.
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