Virginia forecast to lose 32,000 jobs this year
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Virginia will likely lose about 32,000 jobs this year, according to a new economic forecast from UVA's Weldon Cooper Center.
Why it matters: Signs indicate that the state's labor market is already contracting, and the center projects Virginia's unemployment rate will jump significantly this year.
The big picture: The outsize role the federal government plays in Virginia's economy through federal jobs and contracts is driving the dire forecast, the center's economists wrote in its latest quarterly economic projection.
- They noted that while national employment grew by more than 228,000 jobs in January and February, Virginia lost 8,000 jobs in those months, "signaling a clear divergence from national trends."
Between the lines: The center's new projections are a major shift from their first quarterly forecast, released in February, which anticipated that while job growth in Virginia would slow this year, the state would still add about 1.2 million jobs. But much has happened since then.
- Their new outlook: Virginia will see a net loss in jobs in 2025 (an estimated 31,974 total).
By the numbers: Government employment is expected to see the biggest job loss in raw numbers, per the center.
- 9,099 — the number of government jobs the state is projected to lose this year
- 5,018 — administrative services jobs
- 4,493 — manufacturing jobs (some of these job losses were projected in the February forecast)
- 7,740 — accommodation and food services jobs lost due to an anticipated pullback in in-state tourism
- 6,486 — arts, entertainment and recreation jobs lost, also due to less tourism
Yes, but: The state's largest private-sector job category— professional, scientific and technical services — should add around 3,000 jobs this year, per the forecast.
- Finance and insurance industries and retail are also expected to add 1,899 and 213 jobs, respectively, this year.
- And the state is still expected to see "lower price growth than the U.S. average," a win for price-conscious consumers.
Zoom out: The center projects the state's unemployment rate could hit 3.9% this year and rise to 4.7% next year, which would be Virginia's highest jobless rate since early 2021.
- It's 3.2% now.
The other side: Bryan Slater, Virginia's labor secretary, pushed back on the forecast, telling Axios in a statement that the center's models used outdated data that omitted the 6,000 jobs the state added in March, according to preliminary reports.
- Those jobs offset the 8,000 lost at the start of the year, and the forecast failed to note the 200,000 open jobs in the state right now, plus "more than 70,000" in the pipeline, he added.
Zoom in: NoVa and Hampton Roads will likely take the brunt of these job losses.
- More than 50% of federal workers live in NoVa and around 20% in Hampton Roads, per the center.
- And 62% of federal contracts are spent in NoVa with 16% going to Hampton Roads.
The fine print: The Weldon Cooper Center for Public Service is UVA's research organization that studies economic and population trends across the state to help inform government policymakers.
- Their economic forecasts use data from more than 30 sources, including Moody's, the Bureau of Economic Analysis and the Bureau of Labor Statistics, plus the Virginia Department of Taxation, Virginia Realtors and the U.S. Census Bureau.
What's next: The center's next economic forecast will be released in July.