Virginia’s unemployment rate saw small improvement in July

Virginia’s unemployment rate improved slightly in July.

The percent of unemployed workers dropped from 8.1% in June to 8% last month, according to preliminary seasonally adjusted numbers reported by the Virginia Employment Commission.

There were 344,135 unemployed workers in the state last month, nearly three times as many as a year ago. The civilian labor force statewide, which stood at 4.32 million people last month, was 88,590 people smaller compared with July 2019.

Statewide, the private sector has lost 225,000 jobs in a year and the public sector has lost 59,100, according to the commission. The only major industry to see any job gains year over year was construction, which had 4,600 more jobs last month than in July 2019.

Renee Haltom, a vice president and regional executive at the Federal Reserve of Richmond, said the monthly numbers in Virginia point to a slow recovery.

“It doesn’t feel to me like we’re just treading water,” she said.

The impacts the pandemic has had on the economy have varied wildly by industry. Anything having to do with household goods or home renovations, including home and garden supply and furniture, has been doing OK, she said. Other industries that rely on a personal touch, including hospitality and restaurants, have suffered.

There are still numerous unknowns about what could affect jobs and the economy going forward, including workers balancing jobs and children who can’t return to school as well as whether Congress will provide any additional relief.

Haltom said that in some areas and industries in Virginia where it’s still difficult to find workers, some employers are offering their own education “pods” on site, changing operations hours based on school schedules or offering more flexible hours to keep their employees.

As for federal relief, Haltom said the stimulus checks, extra unemployment benefits and forgivable Paycheck Protection Program loans to businesses have supported spending in the economy.

“If that fiscal support goes away, how much does spending take a hit,” she said.

That said, the expiration of the $600 a week in extra unemployment benefits in late July could mean that August will show more improvement than July, said Joe Mengedoth, a regional economist with the Federal Reserve Bank of Richmond. He pointed to anecdotes from employers who were having trouble filling open positions because the benefit gave workers more than they had earned before.

President Donald Trump, in the meantime, has ordered disaster relief funds to pay an additional $300 in weekly benefits to states that apply. Virginia officials confirmed this week that the state had applied for the funds.

Job growth in Virginia between June and July was largest in the leisure and hospitality industry, which added a seasonally-adjusted 23,800 jobs. Trade and transportation added 3,900 jobs.

Hotels in the Hampton Roads have benefited by being a vacation destination within driving distance to travelers. It was the only travel market among the top 25 in the country during the week of Aug. 15 to surpass a 60% occupancy rate, coming in at 65.3% according to STR, a research firm that tracks hotel data.

The biggest job losses in Virginia between June and July were government jobs. Offset by 1,800 additional federal government jobs, there were 1,000 fewer state positions and 9,800 fewer in local government.

Manufacturing shrunk by 6,700 jobs. Professional and business services lost 6,400, although Mengedoth with the Federal Reserve thinks the number may be overstated because of seasonal adjustment formulas.

Virginia’s 8% unemployment rate remains smaller than the U.S. rate, which was 10.2% in July.

The U.S. Bureau of Labor Statistics reported Friday that rates dropped in 30 states, rose in eight states and remained virtually unchanged in 11 states and the District of Columbia compared with the previous month.

All 50 states, not surprisingly, had higher rates than they did a year ago because of the effects of the COVID -19 pandemic. Massachusetts and New York had the highest rates, 16.1% and 15.9%.