Virginia climbed to the top of CNBC’s annual ranking of America’s “Top States for Business” last week, but the accolade comes as the commonwealth continues to post some of the weakest job growth in the nation.From May 2025 to May 2026, Virginia recorded the third-worst job growth rate in the country, according to Bureau of Labor Statistics data. Employment fell 1.2% over the 12-month period, trailing only Rhode Island and Oregon. Nationally, employment grew 0.27%, while Nevada led the country with 1.92% job growth.Virginia lost 51,400 jobs during the year, which is more than any other state. Maryland posted the second-largest decline at 31,200 jobs.
Much of Virginia’s employment decline has been tied to cuts in the federal workforce and the industries that support it.Federal employment accounted for 20,110 lost jobs, or roughly 39% of the state’s overall decline. The state’s professional, scientific, and technical services sector, which includes many federal contractors, shed 22,600 jobs, accounting for nearly 44% of the total decline. Virginia also lost jobs across most other major industries.Healthcare was one of the few bright spots. The sector added about 9,690 jobs over the year, a 1.57% increase, though that growth was not enough to offset losses elsewhere.The weak employment numbers stand in contrast to CNBC’s latest business rankings, which placed Virginia third overall after evaluating states across 10 categories, including workforce, infrastructure, economy, cost of doing business, and quality of life.CNBC said it determines the weight of each category by analyzing how frequently states emphasize those factors in their economic development marketing materials, then scores each state using the latest available economic data.Virginia’s struggles also come as the national labor market shows slight declines.KEVIN WARSH’S TASK FORCES SET TO TRANSFORM THE FEDThe U.S. economy added 57,000 jobs in June, below economists’ expectations, according to the Bureau of Labor Statistics. Even so, the unemployment rate edged down to 4.2%.The mixed national jobs report presents both opportunities and challenges for President Donald Trump as the administration heads toward the 2026 midterm elections.
