Press Releases

The U.S. Bureau of Labor Statistics (BLS) today reported that the unemployment rate in Virginia rose again in July, to 3.6 percent, the seventh consecutive increase in the Commonwealth’s unemployment rate. Virginia’s 0.8 percent year-over-year unemployment rate increase is now the second fastest in the nation during that period, tied with Oregon and trailing only Mississippi. In the past 50 years, Virginia’s unemployment rate has only risen this sharply six times, all preceding or during nationwide recessions.

Virginia’s labor force participation rate (LFPR) declined in July, to 64.9 percent. Labor force participation in Virginia has declined every month since January, and 2025 has already seen the Commonwealth’s sharpest LFPR decline since the early months of the pandemic. 

The BLS data likely downplays the state of Virginia’s labor market, as a significant portion of the federal workers and contractors who have lost their jobs due to the Trump Administration’s purges of the federal workforce are not yet reflected in government labor statistics because their departures officially take effect later in the year. Additionally, President Trump’s tariffs are also keying a substantial slowdown in the labor market across the country.

Congressman Don Beyer (D-VA), who serves as the top House Democrat on the Congressional Joint Economic Committee, said:

“Thanks to Donald Trump, Glenn Youngkin, and Winsome Earle-Sears, Virginia’s unemployment rate is rising faster than nearly every other state in the country. Unfortunately, we have every reason to think it will get worse, as Trump’s purges of federal workers and contractors drive a surge in unemployment that may spread to other job sectors. Virginia families and small businesses are getting hit harder every day by Trump’s tariffs, with higher inflation and rising costs. The worst part is that our economy isn’t reeling from a natural disaster or a global financial crisis, this is happening entirely because of bad policy choices made by Republican leaders.”

CNBC recently downgraded Virginia in its annual “Top State for Business” rankings to the lowest point in nearly a decade, specifically citing “federal job cuts.” Recent mass firings by the Trump Administration are likely to substantially increase these cuts even further in coming months.

The rising unemployment rate in Virginia may also be an early indicator of broader damage to the Commonwealth’s economy which Virginia-based forecasters warn could be severe. Yet despite these warnings and increasingly threatening strains on local governments, Governor Youngkin and Lieutenant Governor Earle-Sears have so far continued to support the Trump Administration’s mass layoffs and broader cuts to the federal government’s footprint in Virginia.

Historical economic data, including unemployment rates for states including Virginia, is tracked by the Federal Reserve Bank of St. Louis (FRED).

Rep. Don Beyer (D-VA) is the Senior House Democrat on Congress’ Joint Economic Committee, and serves on the House Committee on Ways and Means, which has jurisdiction over major economic levers include tax policy, trade, and Social Security. He previously served as Virginia’s Lieutenant Governor from 1990-1998.