Virginia unemployment claims rise amid federal layoffs

A recent spike in Virginia unemployment claims can likely be traced to sweeping federal layoffs under the second Trump administration.

For the week ending May 3, the number of individuals filing initial claims for unemployment was 2,720, according to a Thursday news release from the Virginia Department of Workforce Development and Advancement, which is also known as Virginia Works. That’s an 8.1% increase in claims over the previous week and an 8.9% increase over a comparable week in 2024.

“We are starting to see some job losses,” Terry Clower, professor of public policy at George Mason University’s Schar School of Policy and Government, said. “It’s not a huge number yet, but it’s starting to add up.”

Since President Donald Trump returned to the White House in January, more than 100,000 federal employees have been fired or put on leave as part of a measure to cut federal spending. A CNN tracker puts the number of federal workers laid off or targeted for layoffs at 121,361 as of April 28. More than 321,500 federal workers live in Virginia, according to data from the 2023 Census Bureau’s American Community Survey.

The Trump administration has also cut federal contracts to curb federal spending, which is anticipated to result in layoffs among some government contractors. (For instance, in April, Goldschmitt and Associates, a Sterling-based business management firm, announced plans to lay off 217 employees, citing a reduction in a federal contract as the reason for the cut jobs.)

Then, there is Trump’s trade war and its accompanying tariffs, which has grown economic uncertainty,  resulted in $11 trillion in stock market losses in the short term and is expected to result in greater inflation and supply chain problems.

The increase in unemployment claims, Clower said, is a result of a “compounded storm of tariffs hitting parts of Virginia that deal a lot with trade and the supplies that we get in for manufacturing, and then, of course … dealing with the uncertainty of federal employment and federal contracts at the moment.”

Like Clower, João Ferreira, a regional economist at the University of Virginia’s Weldon Cooper Center for Economic and Policy Studies, was not surprised by the state’s increase in unemployment claims.

In April, the Weldon Cooper Center for Public Service released an economic forecast for Virginia, predicting unemployment in Virginia will continue to grow over the course of the year to a level not seen since 2021. “We expect this to be a trend as the federal activity in Virginia is reduced,” Ferreira said.

About 83% of claimants making initial claims self-reported their occupations. More than 500 worked in professional, scientific and technical services. Other top fields reported by claimants were administrative and support and waste management (275); retail trade (217); health care and social assistance (208); and manufacturing (145).

Ferreira expects to see a reduction in the state’s administrative services jobs as well as a slowdown in growth of professional, scientific and technical services jobs in 2025.

Also in Virginia, continuing unemployment claims for the week ending May 3 were 1.5% higher than the previous week and 15.1% higher than a comparable week in 2024, according to Virginia Works. Those numbers indicate that “those folks that have lost a job are finding it harder to find one now,” Clower said.

Of the 17,896 continuing claims, nearly 92% of claimants self reported their professions. The top industries were professional, scientific and technical services (3,748); administrative and support and waste management (2,225); health care and social assistance (1,579); retail trade (1,392); and manufacturing (1,161).

But Virginia also has seen major layoff announcements outside of the federal government and government contracting in recent weeks. Earlier this month, Georgia-Pacific told 554 employees they would lose their jobs at its Emporia plywood mill, which the company is closing in response to a 30-year low in existing home sales.

Gov. Glenn Youngkin’s office declined to comment on Virginia’s increase in unemployment claims.

U.S. Sen. Mark Warner, Virginia’s Democratic senior senator, touched on the economy during a Thursday media call.

“I’ve never seen a more self-made economic crisis,” said Warner, “and it is created because of the whim of one individual: Donald Trump.”