Virginia’s unemployment rate has risen for seven consecutive months, reaching 3.6%, a trend not seen since 2008, as the state grapples with federal job losses and manufacturing setbacks.
The job losses are being partially driven by federal workforce reductions linked to Elon Musk’s DOGE initiative.
“We’ll get to September, or the end of September when the buyouts end for many workers who may or may not have moved on to something else. So, I think most folks expect to see a spike in unemployment,” said John Provo, Executive Director of VT Center for Economic and Community Engagement.
The manufacturing industry has been particularly affected, with international trade policies playing a significant role in local job markets.
“We have seen layoffs in tariff sensitive industries, the most notable of which being Volvo,” Provo noted.
Volvo announced approximately 350 layoffs at its Dublin plant, impacting an area already facing employment challenges. According to Provo, the New River Valley region currently reports the highest unemployment rate in the state, primarily due to manufacturing sector reductions.
In the past year, many southwest Virginia cities have seen unemployment rates continue to climb. According to the Bureau of Labor Statistics, Lynchburg’s unemployment rate increase from 4.4% to 5.0% over the past year, while Roanoke’s rate rose from 3.4% to 4.0%.
Despite these trends, some areas remain optimistic. “There’s a strong outlook because a lot of the jobs have been announced, a lot of them are being created actively or will be in the years to come,” said John Hull, Executive Director of the Roanoke Regional Partnership.
Hull emphasized that Roanoke’s diverse economy provides some insulation from the job losses affecting other parts of the state. “You see a lot of softening in the Hampton Roads and northern Virginia markets. The Roanoke economy is more diverse and a little better protected,” he said.
The state’s employment outlook remains uncertain as various sectors continue to adjust to changing economic conditions.