Labor Market
Virginia’s seasonally adjusted unemployment rate held at 3.6% in September, unchanged from August and 0.2 percentage point higher than a year earlier, Virginia Works, the state’s workforce development agency, reported Wednesday, Oct. 21. The national rate was 4.2%.
The steady rate hides two different stories. Employers added 7,800 jobs over the month, but Virginia still had 25,600 fewer payroll jobs than in September 2025, a 0.6% decline. The two largest annual declines were in federal government employment, down 18,300, and professional and business services, down 15,300.
A smaller labor force, not a jump in layoffs
The household survey, which counts Virginia residents where they live, showed the labor force shrinking by 4,160 to 4,461,175 in September. Employed residents fell by 3,228 to 4,301,622, and the number of unemployed residents fell by 932 to 159,553. The labor force participation rate, the share of residents 16 and older who are working or actively looking for work, slipped 0.1 point to 62.7%.
Because the number of employed and unemployed residents both declined, the unemployment rate did not move. A smaller labor force means fewer people working or job hunting. It is not a count of layoffs: the change can reflect retirements, people leaving the state, students or caregivers stepping back, or job seekers who stopped looking. The release does not break down the reasons.
Without seasonal adjustment, Virginia’s rate was also 3.6%, 0.4 point below the national unadjusted rate of 4.0%. Compared with a year earlier, the unadjusted count of unemployed Virginians rose by 9,023 to 162,201, and household employment fell by 72,990 to 4,284,827.
Where payroll jobs moved
The establishment survey, based on employer payrolls, counts jobs rather than people, so its figures differ from the household count. Total nonfarm employment rose by 7,800 to 4,250,600 in September. Private employers added 7,000 jobs, and government added 800.
Eight of 11 industry sectors gained jobs over the month. Education and health services led with 3,400, reaching 632,800, followed by miscellaneous services, up 1,300, and construction, up 1,200. Manufacturing and information each added 900. Professional and business services lost 1,000 jobs and financial activities lost 500.
Over the year, the picture is weaker. Eight sectors are smaller than in September 2025. Professional and business services dropped 15,300 jobs, or 1.9%, to 788,100. Federal government employment fell 9.7% to 169,700. State government added 3,000 jobs and local government 7,700, so total government employment was down 7,600.
Education and health services posted the largest annual gain, 8,200 jobs, followed by leisure and hospitality, up 3,000, and trade, transportation and utilities, up 2,200.
Northern Virginia carries the annual loss
Among metro areas, the Arlington-Alexandria-Reston division, which covers much of Northern Virginia, had 16,500 fewer jobs than a year earlier, a 1.0% decline to 1,617,900, the largest drop in the state. Richmond was down 9,200, or 1.3%, to 724,900, and Virginia Beach-Chesapeake-Norfolk was down 3,200.
Smaller metros fared better. Charlottesville gained 3,200 jobs over the year, or 2.6%. Roanoke added 1,900 and Staunton-Stuarts Draft 1,000. For the month, Virginia Beach-Chesapeake-Norfolk posted the largest gain, 2,700 jobs.
For manufacturing production workers, the average workweek shortened by 0.4 hour to 38.1 hours in September, and average hourly earnings for private-sector production workers fell 38 cents to $29.09, according to the unadjusted data.
What to watch
The September figures are preliminary and will be revised. For job seekers, the data show where demand is holding up: health care and education, construction and Virginia’s smaller metros. Federal government jobs and professional and business services are still running well below last year, and the Arlington-Alexandria-Reston and Richmond metro areas posted the largest annual declines.
Virginia Works plans to release September unemployment rates for localities on Wednesday, Oct. 28, and statewide and metro figures for October on Friday, Nov. 20.
Sources
- Virginia Works, “Virginia’s September Unemployment Rate Held Steady at 3.6 percent; Labor Force Participation Rate Decreased by 0.1 Percentage Points to 62.7 percent,” October 21, 2026. https://virginiaworks.gov/virginias-september-unemployment-rate-held-steady-at-3-6-percent-labor-force-participation-rate-decreased-by-0-1-percentage-points-to-62-7-percent/
Featured photo: The downtown Richmond, Va., skyline above the James River, photographed March 9, 2025. Representative image; Richmond was among the Virginia metro areas with fewer payroll jobs in September 2026 than a year earlier. Photo: Bdl2001, via Wikimedia Commons (CC BY 4.0). Cropped from the original.
