Arlington’s employment picture appears to be stabilizing after a tumultuous 18 months, during which the county lost thousands of jobs.
With 147,695 county residents employed in the county’s civilian workforce and 4,452 looking for jobs, the county’s jobless rate of 2.9% in July was down slightly from 3% a year before.
New figures were reported Sept. 2 by the Virginia Department of Workforce Development and Advancement.
In adjacent Falls Church, the jobless rate of 3.3% in July was down from 3.6% a year before, with 7,975 in the civilian workforce and 271 seeking jobs.
In both localities, the overall labor workforce declined, falling from 156,062 to 152,147 in Arlington and from 8,482 to 8,246 in Falls Church.
Across Northern Virginia as a whole, July’s jobless rate of 3.4% was up from 3.2% a year before. Total employment was down slightly to 1.68 million, and joblessness rose from 57,442 to 59,027.
Statewide, July’s jobless rate was 3.7%, up from 3.6% a year before, with the total number of unemployed rising from 163,503 to 166,820 during the period.
Declining Virginia labor force raises red flags
Even as the local region appears to be absorbing federal-government downsizing into the overall economic picture, concerns are being raised about a declining civilian labor force statewide.
The commonwealth’s civilian workforce declined by nearly 68,000 people between early 2025 and June 2026, a 1.5% decrease, and the decline has accelerated in recent months.
That’s according to a new data analysis by the University of Virginia’s Weldon Cooper Center for Public Service.
Virginia’s unemployment rate is projected to hold near 3.9% through late 2026, well below the level the Weldon Cooper Center projected in May. However, analysts cautioned, that does not signal a stronger labor market. Instead, it reflects a substantial contraction in the number of people working or looking for work.
Because people who retire, stop searching for work or move out of state are no longer counted as unemployed, employment “can fall sharply without producing an equivalent rise in the unemployment rate,” analysts said.
“The moderate rise in unemployment conceals a real contraction in the pool of workers participating in Virginia’s economy,” said João Ferreira, acting director of the Center for Economic and Policy Studies at the Weldon Cooper Center.
“The scale and persistence of this decline are unusual relative to the state’s recent experience, and they point to greater underlying weakness than the unemployment rate alone would suggest,” he said.
According to the state government, Virginia’s labor-force participation rate decreased by 0.1 percentage points to 63% in July.
The participation rate measures the proportion of civilians age 16 and older who are employed or actively looking for work.
In late August, the Spanberger Administration launched Virginia Jobs Day, a new monthly initiative designed to provide Virginians with a comprehensive, data-driven report on the commonwealth’s labor market and what current workforce trends indicate about the state of Virginia’s economy.
Each month, Virginia Jobs Day will bring together labor market information from across the commonwealth to “provide a clearer picture of where Virginia’s economy stands, how conditions are changing, and where opportunities are emerging,” state officials said in announcing the initiative.
“Virginia Jobs Day gives Virginians a regular and comprehensive report on the state of our labor market, while helping explain what the numbers tell us about the broader commonwealth economy,” Virginia Secretary of Labor Jessica Looman said in a statement accompanying the announcement.
Metro area’s unemployment picture mixed
Both the number of those employed and seeking jobs declined in July from a year before across the Washington, D.C., region, according to new federal data.
With 3,473,856 residents counted as part of the civilian workforce and 137,741 looking for work, July’s metro-area jobless rate of 4% was down from 4.1% in July 2025.
The metro area’s total workforce, counting those with and without jobs, declined 2.3% year over year to just under 1.74 million — a loss of just over 40,000 as some residents leave the workforce and others relocate.
Despite the slightly improved unemployment rate, the D.C. region’s decline of 2.2% of total nonfarm employment year-over-year was the largest drop nationally, both in percentage and raw terms.
The region was one of 241 of the nation’s 387 metropolitan areas to record a lower year-over-year jobless rate in July, according to the federal Bureau of Labor Statistics. Rates were higher in 128 areas, unchanged in 18.
A total of 22 metro areas had jobless rates of less than 3% during the month, with seven areas reporting rates of 8% or more.
In July, the lowest unemployment rates were found in Bismarck, N.D., Rapid City, S.D., and Sioux Falls, S.D., at 1.9% each. The highest rate was reported in El Centro, Calif., at 19.7%, followed by Yuma, Ariz, at 18.9%.
Of the 56 metropolitan areas with a 2020 Census population of a million or more, Honolulu had the lowest jobless rate in July, 2.8%. The highest rate was reported in Fresno, Calif., at 7.7%.
Figures are non-seasonally adjusted. July 2026 figures are preliminary and subject to revision.
