When unemployment rates drop, job numbers typically climb. The Bureau of Labor Statistics (BLS) report last week, however, saw both the number of jobs and the unemployment rate drop. 

Economist Stephen Moore told the Washington Post this phenomenon means “fewer people looking for jobs.” That, he continued, is “a big economic story: Where are the workers?”

According to information released Monday by the BLS looking at employment changes year-over-year in the 50 largest metropolitan areas, they’re not in Virginia. 

All three urban areas in the report – Virginia Beach/Chesapeake/Norfolk; Richmond; and Washington/Arlington/Alexandria – saw employment drop. In the Virginia Beach area employment is down 0.5 percent, and in Richmond it’s down 0.7 percent. Neither is statistically significant, according to BLS.

The numbers in Northern Virginia and Washington, on the other hand, tell a different story. 

Overall, the region is down by 83,500 employees, a YOY decline of 83,500 jobs. A 2.7 percent drop.

“The reasons are not clear,” Curry Roberts told VFP. Roberts, who is a former Secretary of Economic Development for Virginia and past president of the Fredericksburg Regional Alliance, believes the loss in federal jobs as a result of cuts and buyouts imposed by the Department of Government Efficiency (DOGE) last year has much to do with these numbers. 

In addition, Roberts said, there are also people who chose to take the buyout and retire. “It’s also a bad job market for recent college graduates,” he added.

Terry Clower of George Mason University agrees that DOGE’s actions are a significant part of the decline in employment numbers. And he anticipates that these numbers will continue looking bleak through the end of the quarter. 

While Virginia’s three largest urban areas are seeing employment fall, North Carolina’s two biggest urban areas – Raleigh/Cary and Charlotte/Concord/Gastonia – are among the urban communities seeing jobs increase. Employment is up 2.6 percent in Raleigh, and 1.6 percent in Charlotte. Both figures are identified by BLS as statistically significant.

North Carolina and Virginia are regularly vying for the top spot in CNBC’s Best Place for Business survey. This year, North Carolina finished No. 2, and Virginia No. 3. 

But those surveys aren’t particularly revealing, according to Clower, who is professor of public policy at the Schar School of Policy and Government.

“Virginia is not growing,” he said. In Northern Virginia, he pointed out, “the fastest growing sector has been data centers, and we’ve seen that pull back in some markets but not all.” Further, “manufacturing overall is not particularly growing.”

Part of North Carolina’s success, he said, is that the Tar Heel State “has a better tax structure for manufacturing, and is seen as a better labor market than parts of Virginia.” 

Finally, he notes, “actions of the state legislature to eliminate the data center sales tax exemption that had already been promised … certainly does not help our reputation among businesses looking to locate here.”

While employment in NOVA, Richmond, and the Virginia Beach area are declining, Tom Scott – president of Virginia’s Innovation Crossroads, is bullish on the Fredericksburg region. 

“While the recent uptick in local unemployment is a direct byproduct of Department of Government Efficiency (DOGE) federal cuts, elevated interest rates, and a temporary national slowdown in tech venture capital,” Scott said, “the long-term outlook for Virginia’s Innovation Crossroads has never been stronger.”

He reports “unprecedented job growth” across four core sectors:

• Infrastructure Trades: Data center builds are fueling a multi-million dollar surge in local construction, electrical, and plumbing small business contracts.
• Defense Engineering & Cyber: Broad expansions at local contracting hubs supporting Quantico and NSWC Dahlgren are driving immediate demand for systems engineers and network security specialists.
• Healthcare & Biomedical: Regional medical networks are aggressively hiring clinical nurses and specialized biomedical technicians to support our growing population.
• Logistics & Supply Chain: Capitalizing on the I-95 and Route 301 corridors, our distribution hubs are scaling up advanced manufacturing, transportation, and logistics management roles.

The goal, he said, is to build a self-sustaining economy designed to withstand federal volatility.