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byline: Robert Powell, III

Northern Virginia credit unions to combine

Two Fairfax County-based financial institutions, Apple Federal Credit Union and Vantria Federal Credit Union plan to merge in May.

Apple will absorb Vantria, including all of its employees. Apple officials expect no layoffs or branch closings related to the merger. Vantria members automatically will become Apple members and have access to its products and services.

The merger has been approved by the National Credit Union Administration.

In a news release, Patricia Malatesta,  Vantria’s CEO, said the credit union had been hurt by the recent real estate market decline, loan defaults and bankruptcies as well as the increased burden of a changing regulatory environment.

“Our board of directors and management conducted an extensive search to find a prospering credit union with excellent growth potential and selected Apple FCU as the best possible partner,”  she said in a statement.

Vantria, founded in 1950,  has $73 million in assets, and more than 7,700 members. It has one branch in Springfield.

Apple was established in 1956. It has assets of $1.7 billion, 21 branches and more than 148,000 members.

“Apple will benefit from a larger member base and a slightly broader branch network, resulting in greater convenience for members of both credit unions,” Larry Kelly, Apple’s president and CEO, said in a statement. He added that the credit unions share many core values including a strong membership focus and sense of community.

Apple serves Fairfax, Frederick, Loudoun, Prince William and Stafford counties.

Compromise has become the lost art of politics

The impasse appears hopeless.

“The longer the stalemate drags on, the greater the cynicism and the less anyone of either side will be able to speak … with any credibility.”

That quote was from an essay by Dennis E. Ross in The New York Times about the prospects for a “two-state solution” settling the long-running conflict between Israelis and Palestinians.

The same phrase could aptly describe the entrenched positions of President Obama and congressional Republicans before the March 1 deadline for the beginning of sequestration ($85 billion in automatic federal budget cuts this year).

The lack of movement on either side made me wonder: Will we see peace in the Middle East before we have a deficit reduction agreement in Washington?
The art of compromise is out of favor in today’s politics. Instead of being seen as a tool for making tough decisions, compromise is scorned as a sign of lack of dedication to a higher cause.

Politicians fear that giving ground on an issue emboldens opposition, not from the rival party but from their own party. Because of the egregious redistricting process that follows every national Census, most congressmen and legislators are ensconced in “safe” districts and face no threat in the general election. Their greatest fear is a challenge from the fringes on their party, on the far left or far right, in a primary decided by a handful of one-issue diehards.

In an atmosphere like this, I guess we shouldn’t be surprised that no deal was reached on sequestration before March 1. (As this issue goes to press, Obama and congressional leaders have begun informal meetings as a first step toward a “grand bargain” on deficit reduction, but no breakthrough has been reported.)
Virginia is especially vulnerable to the effects of sequestration because federal spending represents about a third of the state economy.  Last year, the federal government awarded $54.6 billion in contracts in the Old Dominion, according to Bloomberg Government.

Christine Chmura, the president and chief economist with Chmura Economics & Analytics in Richmond, says the automatic cuts could push Virginia into a recession costing more than 200,000 jobs.

Many Virginians believe the federal government needs to reduce spending. But the across-the-board, meat-ax approach “was designed to be stupid,” Nobel Prize-winning economist Paul Krugman said on MSNBC. “The whole point was, this was supposed to be a doomsday device that would force the [Democratic and Republican] parties to reach an agreement. Of course, they didn’t, and here it goes.”

One Virginia defense contractor, Jeffrey D. Wassmer, president and CEO of Spectrum in Newport News, says the politicians have to stop treating sequestration like a political football.  “Campaigning is one thing, but execution and government is another thing,” he says. “These guys have to find ways to compromise. Look at our statehouse. We passed a transportation bill by not everybody getting what they wanted. That same attitude has to exist in Washington.”

The first legislation making a significant boost in transportation funding in 27 years came during this year’s General Assembly, when a bipartisan bill was passed at the last minute. It promises to raise $880 million a year, largely through new taxes and fees.  The bill began with a proposal by Republican Gov. Bob McDonnell to eliminate Virginia’s gasoline tax and increase the state sales tax to replenish the commonwealth’s dwindling transportation coffers. 

Action came, some say, because Virginia’s transportation woes have begun to tarnish its much ballyhooed reputation as a good place to do business. The commonwealth recently slipped from first to third in an annual ranking of top states by CNBC because of its crumbling infrastructure. The Washington-Northern Virginia area has the worst traffic congestion in the nation and traffic tie-ups throughout the state cost motorists $3.7 billion a year, according to the Texas Transportation Institute.

A transportation funding solution had evaded the grasp of five governors since the last comprehensive bill was passed during the administration of Gov. Gerald Baliles back in 1986. McDonnell took office in 2010 pledging to fix the problem without raising taxes. During the past three years, he exhausted a list of potential alternatives. Most of them, like an attempt to raise money by selling the state’s ABC stores, fizzled in the General Assembly. Others that did win approval, such as issuing bonds for road projects, did not provide the consistent revenue stream the commonwealth needs.

The final deal, which McDonnell was expected to sign, won the endorsement of the bond rating agency Moody’s Investors Services and the approval of many business groups.

McDonnell sees the transportation bill as the major accomplishment of his administration.  But some conservatives are determined to make sure that legacy is a curse, especially if the governor has any presidential ambitions. 

The Patriot Super PAC, a tea party group, has begun running television ads attacking McDonnell in Iowa, whose caucuses will lead off the 2016 presidential campaign.  “McDonnell promised Virginians he would not raise taxes, but as governor he has now backed the largest tax increase in Virginia history on retail, gasoline, property, cars, land and more,” the ad says. “So, if Bob McDonnell comes to Iowa, remember: You can’t believe a word he says.”
No attempt at compromise goes unpunished, a situation that leaves politicians in safe seats and government in gridlock. 

Keeping aim on the governor’s goals

Douglas W. Domenech is responsible for maintaining the commonwealth’s environmental quality while pushing efforts to develop new energy resources off Virginia’s coast.

“Our goals are the governor’s goals,” says Domenech, who has been secretary of natural resources under Gov. Bob McDonnell since January 2010. “It was pretty clear from the beginning that the governor was interested in a couple of key environmental goals. [They included] improving the health of the Chesapeake Bay and land conservation, continuing the effort to conserve open space in Virginia. Then a third [goal] is pursuing an all-of-the-above energy strategy,” including offshore wind, oil and natural gas.

Entering the administration’s last year, Domenech says progress has been made on many of these goals: the bay is healthier, 156,000 acres have been preserved, and Virginia is within months of the nation’s first offshore wind lease sale.

But Domenech says one concern has worried him and many of his predecessors. “There is an environmental challenge … which impacts communities and economic development,” he says. “That is the coming problems or potential problems with our groundwater supply in the eastern part of the state, from I-95 east. We monitor that aquifer, and we have been noticing for many years that it’s not recharging as fast as it’s being used.”

McDonnell has put additional funds in the state budget to monitor the aquifer. “It’s something that may not be an issue for 10 years and maybe not even for 20, but it is an issue of concern for us,” Domenech says.

Meanwhile, Domenech and other state officials still are trying to develop more offshore energy sources. The expected federal lease sale of oil and natural gas sites off the Virginia coast was postponed after the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Now the U.S. Department of Interior has scheduled the sale to take place during a five-year plan that doesn’t begin until 2017. The McDonnell administration wants that timetable to be moved up.

A graduate of Virginia Tech, Domenech was senior vice president of Artemis Strategies, a Washington, D.C.,-based government relations and strategic communications firm, before being appointed to McDonnell’s cabinet. He was a senior official in the U.S. Department of Interior throughout the presidency of George W. Bush. From November 2005 to January 2009, he was deputy chief of staff for Interior Secretaries Gale Norton and Dirk Kempthorne.

As secretary of natural resources, Domenech oversees six state agencies: the departments of Environment Quality, Conservation and Recreation, Historic Resources, Game and Inland Fisheries and Marine Resources plus the Virginia Museum of Natural History in Martinsville. Virginia Business talked with Domenech at his office in the Patrick Henry Building off Capitol Square in Richmond on Feb. 26. Attending the interview were Deputy Secretaries Maureen Matsen and Anthony Moore.

Below is an edited transcript. A video of the interview is available at www.VirginiaBusiness.com.

Virginia Business: What sort of accomplishments do you chalk up [for the past three years]?

Domenech: We really have made remarkable gains in the health of the Chesapeake Bay. I say that not only on the regulatory side…. Working on voluntary efforts with farmers and industry has made an enormous difference. … The bay is becoming healthier. We think we have worked hard to make that happen. …
EPA has provided us a number of awards. We won the biggest-loser award for reducing the amount of nitrogen and phosphorous that goes into the bay, so that was a big accomplishment for us. In addition, after 15 years, the governor has been able to work with the [Army] Corps of Engineers to get the sea wall built at Tangier Island. …

In this General Assembly we were able to pass legislation to consolidate some of our water quality programs into one program. That will be a great benefit to the people who have to get permits. …

We’ve been able to add about 156,000 acres to the open space easement program. …

On the energy side, we created several permits by rule, which makes it much easier for folks who want to develop a wind project or a solar project to meet the criteria. They know exactly what they need to meet, and if they meet it, they get the permit. …

As part of that all-of-the-above energy strategy, we’ve worked on nuclear generation, coal, gas, offshore wind, onshore wind and Outer Continental Shelf oil and gas. We’ve been working on really everything, including efficiency, gas from landfills, you name it. …

On the offshore wind side … we have worked very closely with all of the interests that are offshore — the maritime industry, the defense industry — to allow space for that wind generation. … This year we should have the first offshore wind lease sale. … That’s very exciting, and we think it’s a great opportunity for the port, for people who make these wind turbines. We think we have a robust industry down there that’s prepared to do it, and that makes a big difference. …

The governor was instrumental in creating the Outer Continental Shelf Governors Coalition of all the states that have any sort of coastal presence [on the East Coast and the Gulf of Mexico]. We’re working very hard with [the Department of] Interior to get our offshore oil and gas lease. …

We have had a couple opportunities to promote the water quality improvements in the budget. This past General Assembly just approved $216 million in wastewater bonds. That money will go to an existing [Department of Environmental Quality] program to help municipalities with wastewater treatment facility upgrades. …

In addition, we’ve created a new $35 million matching grant fund to help communities with storm water. This will help them with the infrastructure improvements that they need to make for storm water.

VB: What sort of things did you want to get done that you know won’t be done by the time you leave and will be left for the next administration?

Domenech: That’s an interesting question. … There is an environmental challenge … which impacts communities and economic development. That is the coming problems or potential problems with our groundwater supply in the eastern part of the state, from I-95 east. We monitor that aquifer, and we have been noticing for many years that it’s not recharging as fast as it’s being used. …

At a conference, Environment Virginia, which is held out at VMI, I had a panel discussion last year, and I invited the previous four secretaries [of natural resources] … and I asked them: What do you think is the biggest environmental challenge facing Virginia? They all said the same thing, which was groundwater.

It is a problem that will create pressures on current industries to maybe think more creatively about how to use different kinds of water. Do they have to use groundwater? A lot of industrial processes could use what we call greywater, water that hasn’t been treated but could be perfectly fine for their use. So groundwater is a big issue, and we have tried to sound the alarm. The governor put money in his budget to create some additional monitoring of that aquifer. It’s something that may not be an issue for 10 years and maybe not even for 20, but it is an issue of concern for us.

VB: Is it simply that there are more people or more industries using that water, and that it’s just not replenishing itself?

Domenech: It’s probably that plus water patterns. … We’re cognizant of that and have worked with our economic development team to say that before we reach out to companies to come in, we really need to work with them to see if there are alternative ways to give them the water they need in order to promote economic development.

VB: Do you think this would lead to any kind of water restrictions at any point?

Domenech: It could at some point, but we’re not near there now.

VB: What has your relationship been with the EPA?

Domenech: Well, I don’t think it’s changed. … We work with them across many issues: the bay, air quality, other water-quality-related things. We have the brown fields program, which is a continuing issue. …

Of course we’ve been involved in and supported the attorney general’s [and Fairfax County’s] lawsuit on Accotink [Creek watershed in Fairfax]. … The law allows EPA to regulate certain pollutants like nitrogen and phosphorous sediment, but what they tried to do is create a TMDL that was really based on the flow of water. [“Total maximum daily load” (TMDL) is a regulatory term describing the maximum amount of a pollutant allowed in a body of water while still meeting water quality standards.]

Water itself became the pollutant. That’s really what the lawsuit was about. It basically was saying we understand environmental protection, and we’re not opposed to that at all, but you can’t go beyond your authority and try to make water a pollutant. [The EPA decided in March it would not appeal a federal district court’s ruling in January that the agency had illegally overreached its authority.]

VB: Going back to offshore oil and natural gas, I saw that the governor was one of several governors sending a letter to the nominee for the [U.S. Department of the] Interior [Sally Jewell, the CEO of Recreational Equipment Inc. in Seattle] asking for movement on oil and natural gas. Do you have any indication that with her coming on board that policies are going to change?

Domenech: I think it’s too soon. She interestingly enough has an engineering background and used to work for Mobil Oil. … Some people say she has a very green background. I would say she has a very outdoor recreation background. She’s very much into hiking and camping and that kind of stuff, which is a little bit different than just having a strictly environmental view.

VB: Some of your agencies have been involved in looking at whether the state is ready to regulate uranium mining if the ban is ever lifted. How confident are you that the state could regulate uranium mining if the ban was lifted?

Domenech: I’m very confident that we could do it, but my confidence shouldn’t be read as saying we should do it. Virginia really has an outstanding set of agencies that care deeply about the environment. Department of Environmental Quality, Department of Health and the Department of Mines, Minerals and Energy are the three agencies that came together and basically did the work to say that, if we did it, what are the issues that would have to be regulated? I think if the General Assembly and the governor ever came to the conclusion that uranium mining should happen I’m pretty confident we could regulate it. Whoever does it would have to meet that regulatory burden.

VB: Now we talked about wind energy, and how that’s a possibility. What is the state doing on its side to encourage wind energy?

Domenech: VOWDA [the Virginia Offshore Wind Development Authority] worked to site the first lease in a way that works for everybody. Then we worked to do the environmental work offshore, working with Interior to get that done. Interior then puts out what they call a request for information where companies indicate if they’re interested in bidding. They qualify those bidders. … [Ten] separate companies have expressed an interest in bidding for the lease. The BOEM, Bureau of Ocean Energy Management, at Interior, will announce their intention to hold a lease sale. I think there’s a 60-day comment period, and then there’s the lease.
We’re very anxious to see what happens with that. The country has never had one of these. This is groundbreaking stuff, so we don’t know how the leases will work and have no idea what kind of money might be involved at this point. Obviously, the federal government is trying very hard to accommodate this form of energy development, and we’re happy to accommodate that. We think Virginia’s the right place to do it. That’s sort of the status.

Matsen: Not in this year’s budget effort but last year’s budget effort we got $500,000 to commit to developing offshore wind and $300,000 of that is being used to partner with the Department of the Interior, BOEM, for matching funds to do the surveys of the bottom of the ocean in our wind area. That will help reduce costs for developers because it eliminates one of the areas of risk. They’ll actually know what’s going on at the bottom of the ocean.

This year the General Assembly was generous enough to commit another $1 million. VOWDA has a wish list of things to do with that money. We’ve done transmission studies. Dominion has done two transmission studies to examine the interconnects when you come onshore [with wind-generated power] and also to examine what sort of transmission you would want for developing those projects. That’s been an important element of what we’ve done.

VOWDA really is an exceptional group of experts that stay on top of all of the new advancements that are going on. Dominion recently just won a $4 million grant from DOE and the state is part of that grant. Alstom [Power Inc.] is a partner and there are several other partners to look at wind turbine foundations. Again this is part of DOE’s broad effort to bring the cost of offshore wind down because everybody recognizes that right now those costs are prohibitive. If you can develop a foundation that is cheaper and more useful and will withstand the various vagaries of pressure it has to sustain out in the ocean, that can reduce your costs and reduce your risk, and risk is a big cost.

VB: We’ve talked about your relationship with the EPA. What sort of relationship have you had with the environmental community?

Domenech: I think “the environmental community” is a very broad statement. We have some, like the Chesapeake Bay Foundation and the James River Association here in town, [that have] put out releases in the last few weeks just congratulating the governor for all the water quality-related things. We’ve worked a lot with those groups because we’re pulling in the same direction. There are some groups in the state that don’t really want to talk about how we work on recurrent tidal issues. They just want to talk about why they hate coal and how that somehow impacts the climate. That’s a much deeper discussion, and I think it’s pretty clear that scientists disagree a little bit on that. I think we’ve tried to focus our efforts on really what we’re supposed to be doing in the state to prepare for [rising] sea level or whatever it is. We need to be able to adapt to those things and work with them. The environmental community has been mixed, but we have great friends. We work with them all the time on different issues. It’s largely very cooperative. There are a few on the fringe [that are] not cooperative.

VB: [My understanding from a recent article is] the governor and his administration don’t deny climate change is happening but you’re not ready to say it’s all because of manmade causes.

Domenech: I would say the governor believes that the climate is changing, and scientists are working on why it’s changing. It’s clearly changed in the past. I use the example that one of our agencies, the Virginia Museum of Natural History, is digging up eobalaenoptera [an extinct species of whales] north of Richmond.
… So we know the oceans were a lot higher in the past, way before we were driving SUVs. But also at the same time, the Department of Historic Resources is working on new finds that actually lead them to believe that there were villages as far out as 50 miles into the ocean. In other words, the ocean had receded. I’m just saying science continues to find this stuff. We should study it. We should study it honestly. We should not be biased in one direction or the other.

Genworth selling wealth management business for $412.5 million

Henrico County-based Genworth Financial Inc. plans to sell its wealth management business for $412.5 million.

The purchaser is a partnership involving two private equity firms, New York-based Aquiline Capital Partners and San Francisco-based Genstar Capital.

The deal includes Genworth Financial Wealth Management and the company’s alternative solutions provider, the Altegris companies. Genworth will record an after-tax loss of about $40 million in connection with the sale.

”This transaction is another step forward in executing our strategy, by generating capital from a non-core business and increasing financial flexibility for Genworth,” Martin P. Klein, Genworth’s executive vice president and chief financial officer, said in a statement.  “The sale of Wealth Management also provides the opportunity for our employees there and the purchaser to have a strong business to grow going forward.” 

Last August, Klein was Genworth’s acting CEO when he announced that the Fortune 500 company had completed a strategic review that may result in the sale of some of its operations.  He, however, did not say which units were under consideration.

Disgruntled shareholders for some time had pressured Genworth’s management to dispose of its U.S. mortgage insurance business, which had suffered major losses after the collapse of the housing industry during the recession. The mortgage insurance business, however, has improved in recent years.

In January, Genworth announced. plans to create a new holding company that separates its mortgage insurance business from other operations.

Klein resumed his role as CFO when Thomas J. McInerney became the company’s new president and CEO on Jan. 1. He replaced former CEO Michael Fraizer who resigned in May.

Genworth will record roughly $35 million of the $40 million loss from the sale of the wealth management business in the first quarter, with the rest recorded at the deal’s closing. 
The company expects the sale to close in the second half of 2013, subject to closing conditions, including requisite regulatory approvals.

United Way agencies merge in Southwest Virginia

Abingdon-based United Way Virginia Highlands and Galax-based Twin County United Way are merging.

The combined nonprofit organization, operating under the name United Way Virginia Highlands, will serve the counties of Carroll, Grayson, Russell, Smyth, Washington and the City of Galax.

Officials of the nonprofit said the merger will help it engage donors and volunteers in addressing issues facing its communities.

Travis Staton will continue to serve as president and CEO of United Way Virginia Highlands.

Funds raised through annual campaigns will continue to be used to serve the communities from which the monies were collected.

The combined organization’s board of directors will include representatives from each locality.

United Way Virginia Highlands was formed last September in a merger between the United Way of Russell and Washington Counties and the Smyth County United Way.

The newly expanded organization will serve an area encompassing covering nearly 2,500 square miles and more than 168,000 residents. It provides support to more than 70 nonprofit agencies.

 

 

Economist lowers estimate on Virginia job losses

An influential Virginia economist has revised his forecast on the effects of sequestration, saying that it will cost Virginia fewer jobs than originally expected.

Stephen Fuller, director of the Center for Regional Analysis at George Mason University, predicts the automatic federal budget cuts that went into effect March 1 will eliminate 154,118 jobs in the Old Dominion. That figure is 26 percent lower than the 207,571 job losses Fuller predicted in a study released last July.

Fuller’s latest report, released on Tuesday, still shows Virginia and California bearing the brunt of job losses caused by sequestration, 20.4 percent of an expected 1.58 million jobs nationwide. Fuller had earlier predicted U.S.  job losses to total 2.14 million.

The new report says sequestration will reduce the nation’s gross domestic product (GDP) this year by 1 percentage point, $158 billion, and decrease personal earnings by $80.5 billion this year. The original estimates were a $215 billion drop in GDP and a $109.4 billion decline in personal earnings.

The economist’s revised forecast results in part from the delay in implementing sequestration, from Jan. 1 to March 1, caused by Congress’ passage of the American Taxpayer Relief Act at the beginning of the year. In addition to delaying the budget cuts, the law also continued Bush-era tax cuts for taxpayers except those earning more than $400,000 a year. For that group, the top marginal tax rate rose from 35 percent to 39.6 percent.

Fuller’s new report says that the budget cuts that went into effect on March 1 totaled $85.4 billion, less than originally expected. Cuts will be greater in the next fiscal year, $110 billion, the report says.

The revised analysis also takes into account the fact that federal agencies plan to furlough employees rather than terminate them in order to accommodate budget cuts.

 

McDonnell proposes amendments to transportation bill

Gov. Bob McDonnell is tinkering with the transportation bill passed last month by the Virginia General Assembly.

He has proposed amendments designed to ensure the legislation does not conflict with the state constitution while reducing the costs of some fees.

The proposed changes will be considered by the General Assembly during a “veto session” next month.

McDonnell said one set of amendments would address legal questions raised by Attorney General Ken Cuccinelli concerning regional taxation authorities the bill would establish in Northern Virginia and Hampton Roads. Cuccinelli last week issued an opinion last week saying the bill’s language is unconstitutional.

Amendments would change the regional taxing provision to apply to any planning district commission meeting certain thresholds including population, registered vehicles and transit ridership. Hampton Roads and Northern Virginia are the only jurisdictions currently meeting these criteria.

Other amendments would:
• Reduce an annual fee for alternative fuel vehicles annual from $100 to $64.
• Lower the proposed vehicle titling tax increase from 4.3 percent to 4.15 percent.
• Reduce the rate of taxation for the regional congestion relief fee from $0.25/$100 for real estate transactions to $0.15/$100.
• Decrease the transient occupancy tax in Northern Virginia from 3 percent to 2 percent.
• Ensure transportation funds generated by the bill are used only for transportation.

The bill eliminates the commonwealth’s 17.5 cent per gallon tax on gasoline, increases the state sales portion of the sales tax from 5 percent to 5.3 percent. McDonnell’s expects the amended bill to result in more than $5.9 billion in total revenue for transportation during the next five years.

Hollister plans $29.6 million expansion in Augusta County

Hollister Inc., a company that makes medical devices, will invest $29.6 million to upgrade machinery and expand its Augusta County factory.

The project will include 50,000 square feet of additional warehouse space and new equipment to automate processes, enhance products and increase production volume.

Hollister has operated in the Stuarts Draft area of Augusta since 1979.

“This expansion and expenditure in new technology helps secure the plant’s sustainability and 100 existing jobs into the future,” Gov. Bob McDonnell said in a statement.

Virginia competed against Ireland for the project, the governor’s office said.

McDonnell approved a $250,000 performance-based grant from the Virginia Investment Partnership program, an incentive available to existing Virginia companies. Through its Virginia Jobs Investment Program, the Virginia Department of Business Assistance will provide funding and services to support the company’s retraining activities.

Virginia wines show well in San Francisco competition

Virginia wines captured 61 medals in the recent San Francisco Chronicle Wine Competition.

Commonwealth wineries earned five gold medals, 28 silver medals (including one cider) and 28 bronze medals. 

The gold medal winners included Barboursville Vineyards, Barrel Oak Winery, Gray Ghost Vineyards and Narmada Winery.

The competition drew 5,500 entries from more than 25 states. The panel of more than 70 judges included members of the media, restaurant and hospitality industry wine buyers, retail wine buyers, wine educators, and winemaker and industry representatives.

The gold medal winning wines were: Barboursville’s 2008 Malvaxia Passito, Barrel Oak’s 2010 Cabernet Franc and 2011 Petit Manseng Reserve, Gray Ghost’s 2011 Adieu Late Harvest Vidal and Narmadas’ 2010 Cabernet Franc.

Virginia’s wine industry has grown from six wineries in 1979 to more than 200 today.

Virginia’s jobless rate remains unchanged

Virginia’s seasonally adjusted unemployment rate was unchanged at 5.6 percent in January, after declining the previous three months, according to the Virginia Employment Commission.

The 5.6 percent rate was four tenths of a percentage point below the 6 percent rate posted in January 2012.

The labor force expanded in January for the sixth consecutive month, increasing by 11,627 people, the VEC said.

The unemployment rate takes into account seasonal swings in the labor market.

Virginia’s seasonally adjusted unemployment rate was below the national rate of 7.9 percent, which was up one tenth of a percentage point from December.
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Virginia’s unadjusted unemployment rate increased seven tenths of a percentage point in January to 6.2 percent. That rate, however, was two tenths of a percentage point below the January 2012 rate.

The higher jobless rate is due to cutbacks in the retail and leisure and hospitality sectors after the holidays and winter break closings at public and private schools and colleges.