Unemployment has ticked up again across Northern Virginia, with Fairfax County seeing the biggest year‑over‑year increase, and nearby counties are not far behind, according to newly released data from the Virginia Department of Workforce Development and Advancement.
Fairfax County added 6,005 more unemployed residents in January compared with the same month last year, pushing the county’s unemployment rate from 2.7% to 3.8%. Loudoun County’s rate rose from 2.7% to 3.7%, while Prince William County’s increased from 2.9% to 3.8%. Each county added more than 2,000 unemployed residents over the year.
Those Northern Virginia rates remain slightly below the national average. The U.S. unemployment rate stood at 4.3% in January, up from 4.0% a year earlier, according to the U.S. Bureau of Labor Statistics.
Despite lower overall jobless rates, Northern Virginia’s unemployment is rising faster than the national trend.
“So, unfortunately, we’re underperforming the U.S. as a whole,” economist Keith Waters said.
Waters, the assistant director of the Center for Regional Analysis and Stephen S. Fuller Institute at the Schar School of Policy and Government at George Mason University, said the local increases reflect continued changes tied to the federal workforce.
“The big takeaway is that this is a continuation of the contraction in the federal workforce following the federal workers who took the deferred retirement package in October,” Waters said.
He said the effects of those decisions don’t show up all at once, which can make unemployment increases look sudden.
“It certainly takes some time for these things to come through the system,” he said, adding that federal contractors are also feeling the effects when contracts aren’t renewed.
Looking ahead, Waters said some government jobs could be added back later this year as agencies adjust staffing levels.
“We do kind of anticipate, through the end of the year, that direct federal employment might actually come back up just a little bit as maybe they hire some folks back for positions that they realized were a little bit more crucial than they needed,” he said.
He also pointed to housing as a relative bright spot.
“Some of the numbers coming out of Northern Virginia, as far as demand for sale homes, have been surprisingly strong,” he said.
Still, Waters cautioned that continued weakness in commercial real estate could eventually show up in local budgets.
“It puts more downward pressure on the commercial real estate industry, which might start to bleed into county budgets further down the line,” Waters said.
Fairfax County Executive Bryan Hill acknowledged unemployment is rising, but said there’s still plenty of job activity in the region despite federal workforce shake-ups.
In an interview with WTOP, Hill pointed to what he described as a significant number of open positions across Northern Virginia, saying, “I still have 66,000 job openings as we speak in Northern Virginia.”
He said while some workers have been laid off or displaced, the challenge is less about a lack of jobs and more about matching skills to available positions.
Hill noted that the county is focused on helping workers “recalibrate and reskill” as federal contracting and employment shift.
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