Virginia Labor Market Improved in October
The labor report for October showed improvement in Virginia, placing the Commonwealth among the top three states in terms of job growth for the month. In addition to the 14,000 jobs gained for the month of October, the seasonally adjusted employment numbers were revised upward for September by an additional 8,000 jobs. While monthly changes are subject to revision and can be somewhat volatile at the state level, the momentum clearly seems to be in a more favorable direction, particularly relative to the summer months. Additional signs of improvement in the labor market can be seen in the slight decline in the unemployment rate to 6.4 percent in October.
Job growth in Virginia was dominated by a private sector gain of 13,200 jobs in October, with an additional small gain in the government sector generating a total net increase of 14,000 jobs. Interestingly, over the past three months the local government sector added 6,900 jobs, while federal and state government payrolls were relatively flat. Over the past year, the state added 24,500 jobs and this was the largest 12-month posting since April. Compared to the national year-over-year growth rate of 1.1 percent, Virginia grew by a smaller 0.7 percent as of October. Nonetheless, the state recovered much of the ground lost during the summer months, but similar to the nation, still has a long way to go for a return to pre-recession employment levels.
Closer examination of the payroll numbers reveals broad-based growth across most major industry sectors in the state, with the exception of trade, transportation and utilities and other services. Leisure and hospitality and professional and business services experienced the greatest growth among industry sectors, together adding 10,000 jobs in October. Several other sectors posted significant job growth for the month, including construction, education and health services, and financial activities. Over the past 12 months, professional and business services surpassed other sectors in terms of total job gain, but education and health services matched up in terms of percentage growth over this period. Other significant growth sectors over this period included state and local government; trade, transportation and utilities; and leisure and hospitality. A few sectors lost jobs over the past 12 months, but the largest decline occurred in the information sector, with a loss of 4,500 jobs, despite small gains in September and October.
The household survey reported that Virginia's unemployment rate ticked down in October by one-tenth to 6.4 percent after three consecutive months of increase. Virginia continued to rank among the 10 lowest statewide unemployment rates in the nation. During October, the labor force increased by an additional 16,400 individuals, with most of this gain attributed to higher employment and very little added to the ranks of the unemployed in the state.
October's data highlighted welcome improvement in the labor market for Virginia. Furthermore, the largest metropolitan areas in the state, led by Northern Virginia, shared in the job expansion for the month. It had been over a year since all three major metropolitan areas — Richmond, Virginia Beach, and Northern Virginia — added jobs in the same month. Still, despite the broad-based job growth and a lower unemployment rate, the government sector may resurface as a drag on job growth given recent warnings of another conservative budget cycle for Virginia.
Ann Battle Macheras