While Virginia’s unemployment rate has been ticking up for months, the state’s Republican leadership contends the jobless rate is just one piece of a larger, more complex economic puzzle.
“Virginia has jobs,” Gov. Glenn Youngkin said in an Aug. 19 statement accompanying the latest batch of state employment figures. “This month’s reports reflect modest payroll growth, continued positive revisions in recent months, and strong labor force demand, reinforcing the resilience of Virginia’s job market.”
While Virginia had 246,000 job openings as of the end of June, an increase of 8,000 from May, opportunities have become more scarce in the state’s D.C. suburbs, according to Fairfax County Board of Supervisors Chairman Jeff McKay.
“The number of vacant jobs in Northern Virginia has decreased dramatically,” McKay said during a discussion of the county and state’s economic development work at a board meeting on Tuesday (Aug. 25).
The Fairfax County Economic Development Authority currently has 45,158 active job postings, led by the information technology sector, a dip of about 600 jobs from June.
Data released Wednesday (Aug. 27) by the federal Bureau of Labor Statistics show that a total of 64,885 Northern Virginia residents were reported seeking work in July, up 25% from 51,958 a year before.
During the same period, Northern Virginia’s unemployment rate rose from 2.8% to 3.6%. The D.C. metropolitan area as a whole saw a 16% year-over-year increase in those seeking jobs in July to 143,195, while the unemployment rate grew from 3.4% to 4%.
In Fairfax County, there were 23,736 residents seeking jobs in July, up 27.8% from 18,575 a year earlier, according to data from the Virginia Department of Workforce Development and Advancement.
Per the state data, the year-over-year unemployment rate grew from 2.8% in July 2024 to 3.6% in July 2025. While the 630,886 county residents tallied as employed in July was down from 644,214 a year before, it was the highest in three months, based on non-seasonally adjusted data.
Fairfax’s nearly 28% year-over-year bump in those seeking work was significant, but jurisdictions closer to D.C. had it worse — both Alexandria and Arlington recorded increases of more than 38%, according to state data.
According to McKay, the current challenge is highly skilled (and highly paid) workers being laid off and not being able to afford the cost of housing in the region — a major factor in people leaving the region even before the current federal government upheaval.
The Youngkin administration seemed to acknowledge employment shifts were taking place.
“Our focus remains on supporting jobseekers with training, upskilling, and connections to in-demand opportunities,” Virginia Secretary of Labor Bryan Slater said.
Still maintaining that “Virginia’s job market has proven its resilience time and time again,” Slater pointed to the increases in payroll employment and job openings, coupled with slowing employee terminations, as signs “that employers are still adding jobs in key sectors.”
But Mark Zandi, chief economist for Moody’s Analytics, puts Virginia — as well as Maryland and D.C. — on the list of jurisdictions at “high risk” for recession.
“Based on my assessment of various data, states making up nearly a third of U.S. gross domestic product (GDP) are either in or at high risk of recession, another third are just holding steady, and the remaining third are growing,” Zandi said.
“States experiencing recessions are spread across the country, but the broader D.C. area stands out due to government job cuts,” he noted.
Virginia accounts for about 2.7% of the U.S. GDP and will play a role in whether the national economy slides into recession territory.
Zandi said that except for Virginia, Southern states generally have the strongest economic health in the country at the moment, “but their growth is slowing.”
Across Northern Virginia, total nonfarm employment stood at 1,632,400 in July, according to state data. That’s an increase, albeit a relatively small one of 0.6%, from a year before, and essentially flat month-over-month.
Long seen as the economic engine fueling Virginia’s growth, the northern region underperformed the commonwealth as a whole in year-over-year job creation in July. Statewide, seasonally adjusted nonfarm employment was up 0.8% to about 4.27 million.
Northern Virginia’s year-over-year job growth of 9,200 in July wasn’t even the largest in the commonwealth, as Richmond scored 12,100 net new jobs during the period.