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The unemployment rate -- the number of currently unemployed people seeking jobs -- is a vital indicator of the health of a state's economy and the well-being of its citizens. As with nearly every state in the U.S., Virginia's unemployment rate dropped further in 2016 as the economy continued to recover from recession; Virginia's unemployment rate was lower than all but 14 other states.

Why is This Important?

Unemployment is a measure of how many people without jobs are actively seeking employment. Since most people earn a living through a job, unemployment is also a measure of how the economy is doing in providing opportunities for people to support themselves and their families. Unemployment not only hurts the personal finances of those without work, but also reduces their participation in the overall economy. The inability to find work is also associated with stress, financial hardship, health problems, and strain on family relationships.

How is Virginia Doing?

Unemployment Rate. See text for explanation.Only people who have jobs or who are actively seeking one are considered part of the labor force; unemployed people who have stopped looking for a job are no longer counted as members of the labor force. With a 4.0 percent unemployment rate, Virginia ranked 15th among the states in 2016. Virginia's rank is a sign that the economic recovery is widely shared across the U.S., and now includes 32 states with unemployment rates below five percent.

South Dakota had the lowest unemployment rate at 2.8 percent in 2016, displacing longtime leader North Dakota. Virginia's rate was lower than its peers -- Maryland (4.3%), North Carolina (5.1%), and Tennessee (4.8%) -- and also lower than the national average of 4.9 percent. For the very latest monthly unemployment statistics, explore the state's Labor Market Information (LMI) tools.

Unemployment Rates by Virginia Region. See text for explanation.Every region within Virginia saw a drop in their unemployment rate in 2016. Rates varied from a high of 6.1 percent in the Southwest region to a low of 2.8 percent in the Northern region. The Central, Valley, West Central, and Hampton Roads regions had rates between 4.0 to 4.6 percent, followed by the Eastern region at 4.7 percent. Since 2000, the Southside and Southwest regions have routinely experienced higher rates of unemployment than other areas, largely due to the loss of manufacturing jobs, a high percentage of unskilled labor, and limited economic growth. For current monthly unemployment statistics, explore the state's Labor Market Information (LMI) tools.

Unemployment Rate, By Region. See text for explanation.In 2014, manufacturing, construction, financial services, and transportation and utilities saw increases in unemployment; the most severe increase was in manufacturing, up by nearly three percentage points from 2013. Other industries saw declines in unemployment, including leisure and recreation, trade, information, and professional and business services; the largest decline was in information, where unemployment dropped by over five percentage points. Those in both government and transportation and utilities continued to see unemployment rates below three percent.

What Influences Unemployment?

In the short run, unemployment is largely driven by national macro-economic factors. The jobless rate in Virginia moves with the national business cycle. This is especially true for industry-specific data, as it is highly dependent on national performance trends for each particular field.

One factor recently affecting Virginia's economy -- and as a corollary, its rates for unemployment, personal income, and even job growth -- is the federal budget sequester enacted in late 2011. Since about 20 percent of the state's economy has been reliant on federal spending, these cuts have had a sizable and lasting impact, especially in the Northern and Hampton Roads regions. However, with the passage of the bipartisan Budget Acts of 2013 and 2015, these sequestration cuts have eased somewhat.

Among the long-term factors that affect the unemployment rate in Virginia are those that also affect the state's overall competitiveness: education levels, infrastructure investments, diversity and balance in its economic mix, tax rates, and the regulatory environment. Any changes that improve Virginia's attractiveness as a place to live or to do business will, over longer periods of time, tend to reduce the unemployment rate.

What is the State's Role?

State government has a number of programs that are designed to reduce the level of unemployment or to lessen its impact on people's lives. Most of the work of the Virginia Employment Commission (VEC) is directly related to addressing unemployment issues: The Unemployment Insurance Program provides temporary financial support for workers losing their job; the VEC is also a partner in the Virginia Workforce Network, which has numerous programs designed to match unemployed workers with firms that have jobs to fill.

The Virginia Board of Workforce Development also works to combat unemployment through longer-term programs and incentives designed to improve the state's overall workforce quality. Virginia's community colleges help retrain workers so that they can develop the skills they need to re-enter the workforce. Virginia Performs's Virginia Workforce System Report Card -- a result of partnerships from across the executive and workforce spectrum -- tracks the state's progress in these areas, including attainment of STEM-H workforce credentials and degrees.

Finally, the Virginia Economic Development Partnership works to bring new employers into the state and to encourage existing employers to keep jobs here.

Page last modified June 05, 2017
Unemployment Rates, by StateUnemployment Rate by Virginia Region. Unemployment Rates by Industry

State rankings are ordered so that #1 is understood to be the best.

Data Definitions and Sources

State and regional unemployment data are from the U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics 

State industry unemployment data are from the U.S. Bureau of Labor Statistics, Geographic Profile of Employment and Unemployment

See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Virginia Performs.

At a Glance:
Unemployment in Virginia

Performance Trend:  Trend is improving.
State Influence:

National Ranking: 15th lowest unemployment rate in the nation -- 4.0 percent -- in 2016. 

Virginia by Region: Typically, urban corridors like those found in the Northern, Central and Hampton Roads regions fare better in terms of unemployment.

Related Agency Measures
State Programs & Initiatives

Unemployment Insurance: Virginia administers a variety of programs that may provide temporary income for workers who have become unemployed. Unemployment claims may be filed online or at any Virginia Employment Commission field office.

Job Seeker Services:   Employment assistance, access to thousands of job listings, and job seeker resources -- all available at your local Virginia Employment Commission office.

The Virginia Board of Workforce Development oversees many of the state's workforce initiatives. That includes a system of one-stop career centers that work to train and find jobs for area residents as part of a mandate under the Workforce Investment Act, which aims to increase the employment, retention, earnings and occupational skills of participants.

The Virginia Initiative for Employment not Welfare (VIEW) helps Temporary Assistance to Needy Families (TANF) recipients prepare for and find jobs.

Additional Information

For the very latest statistics on jobs and unemployment in Virginia, check out the Labor Market Information pages. Maintained by the Virginia Employment Commission, the LMI provides a wealth of data on the state's labor force, industries and demographics, including ways to research and compare information down to the locality level.

Hire a Hero is a federal incentive program for employers in the U.S. to hire unemployed military veterans. Employers are eligible for a range of tax credits and discounts, plus aid in posting jobs and tracking paperwork.

Run by the Virginia Department for Veterans Services,Virginia Values Veterans (V3) helps employers recruit, hire, train, and retain veterans as valued employees. Governor McAuliffe has also called on 10,000 businesses throughout Virginia to take "the Patriot Pledge" to hire veterans into the workforce.