Virginia unemployment claims spike in early February

Initial unemployment insurance claims in Virginia increased 71.2% in the first week of February, according to the state.

For the week ending Feb. 7, there were 4,592 initial unemployment insurance claims filed, a Thursday news release from the Virginia Department of Workforce Development and Advancement, or Virginia Works, stated. That number is 43.4% higher than in a comparable week in 2025.

While those percentages are attention-getters, they don’t necessarily mean gloom for Virginia’s economy, cautioned Keith Waters, assistant director of the Center for Regional Analysis at George Mason University.

“The initial claims data is incredibly noisy,” he said.

Looking at initial claims data week by week for 2025, Waters pointed out, shows some dramatic spikes too. “And then they fall back the next week,” he said.

Last week, there were 21,291 continued unemployment claims, according to state data. That’s 0.5% lower than last week, but 23.2% higher than in a comparable week of 2025.

“Continued claims continue to be higher … and given the weakness in the  job market, we would expect more people to remain on unemployment,” said Bob McNab, director of Old Dominion University‘s Dragas Center for Economic Analysis and Policy.

Of those filing initial unemployment insurance claims, about 80% reported their employer. Of those, 1,184 came from manufacturing jobs, 431 came from professional, scientific and technical services; 322 came from administrative and support and waste management; 259 came from construction and 220 from retail trade.

Among the continued claims, more than 91% of filers reported their employers. According to Virginia Works, 3,999 came from professional, scientific and technical services, 2,493 came from administrative support and waste management, 2,058 came from manufacturing, 1,688 came from construction and 1,634 came from health care and social assistance.

Half full or half empty?

Virginia’s monthly unemployment rate has shown a consistent upward trend in recent years.

“It started ticking up a little bit faster in 2025,” Waters said.

Meanwhile, the number of employed people in Virginia has experienced a decline. “Virginia has been trending downward for a year and a half now,” Waters said.

Optimists looking to feel better about that could point to the January jobs report, released Wednesday by the U.S. Bureau of Labor Statistics. It showed U.S. job growth unexpectedly accelerated in January, and the unemployment rate fell by a tenth of a point to 4.3%, signs of labor market stability. Virginia’s December 2025 unemployment rate was at 3.6%, the VEC reported in late January.

Nonfarm payrolls increased by 130,000 jobs last month nationally, according to the report released Wednesday. Economists polled by Reuters had forecast payrolls advancing by 70,000 jobs.

The report also showed that year-over-year 359,000 jobs were created in the United States.

But, maybe don’t jump for joy just yet.

“January looks positive, but if you dig underneath the hood, there are lots of troubling zones,” McNab said.

He pointed out that if you don’t count jobs created in private education or health services, the United States actually lost more than 400,000 jobs year over year.

“All the job growth is predominantly coming from health care,” he said.

That’s something to think about since the budget reconciliation bill, sometimes referred to as the One Big Beautiful Bill Act, which President Donald Trump signed into law July 4, 2025, is expected to cut federal Medicaid spending by $911 billion over a decade.

“So, the thing that’s powering job growth nationally is the thing we expect to see growth slowed in the coming months and coming years because of the impact of the One Big Beautiful Bill,” McNab said.

Where the jobs aren’t

An outcome of Trump’s campaign to shrink the federal government’s payroll, federal government employment nationally is down by 327,000 or 10.9% since October 2024, according to the January jobs report.

Even in January, the segment declined by 34,000 jobs, as some federal employees who took a deferred resignation came off the payroll, according to the federal jobs report.

“We know that some portion of that is going to be in Virginia, yeah?” McNab asked. “So, Virginia is continuing to shed federal civilian employment.”

Mark Sickles, Virginia’s secretary of finance, called recent economic data “mixed” in his January revenue report, which was issued Thursday. It is the first report released since Gov. Abigail Spanberger took office last month.

“The job market has been lackluster,” the report stated. “The rate of job growth has declined at both the national and state level.”

It’s not just federal government jobs that have been lost in Virginia.

“We also lost manufacturing jobs, retail trade, information technology, etc.,” McNab said.

Northern Virginia has been particularly wounded by a drop in professional, scientific and technical services jobs, according to Waters.

“So while the U.S. economy is chugging along, we’re going a little bit slower than they are particularly up in the D.C. area,” he said.

Reuters contributed to this report.