U.S. President Donald Trump speaks to media forward of boarding Marine One to depart to attend the NATO Summit in The Hague, Netherlands, from the South Garden on the White Home in Washington, D.C., U.S., June 24, 2025.
Kevin Lamarque | Reuters
Six months into his second time period in workplace, President Trump has begun to basically change the connection between the federal authorities and the states. Within the course of, he has shaken up CNBC’s annual competitiveness rating, America’s Top States for Business.
Virginia, final 12 months’s No. 1 state and a high three finisher in every of the final 5 years, slips to fourth place in 2025 — its worst exhibiting since 2018 — and cedes the No. 1 spot to North Carolina.
A serious purpose is a drop within the state’s Financial system rating, to No. 14 in 2025 from No. 11 final 12 months. Financial system is the heaviest weighted class within the examine below this 12 months’s methodology as extra states pitch themselves as protected havens in a possible downturn.
Virginia is already seeing a small downturn of types, because the Trump administration units out to slash the federal workforce. That hits The Previous Dominion the place it lives.
The federal authorities accounted for greater than 144,000 jobs in Virginia final 12 months, based on the Congressional Analysis Service. That could be a bigger proportion of the workforce than any state besides Maryland and Hawaii. And that does not embody Virginians who work for federal contractors, or commute to federal jobs elsewhere within the D.C. metro space. Embody all of these, and the quantity approaches 300,000.
In Could, Virginia was certainly one of solely three states whose unemployment fee rose from the prior month, based on the U.S. Bureau of Labor Statistics. The state remains to be including jobs every month, albeit at a slower tempo than final 12 months, and Virginia’s 3.4% unemployment fee in Could was nonetheless under the nationwide common. However the slowdown — and the truth that most of the federal job cuts have but to be mirrored within the official numbers — issues College of Virginia economist Eric Scorsone, Government Director of the Weldon Cooper Heart for Public Service.
“Virginia has been an economic system, traditionally, that’s fairly resilient,” he stated. “However now, we’re seeing one thing fairly totally different, the place Virginia is seeing some job losses, or at the least job stagnation, whereas the nation as a complete remains to be creating jobs.”
The Heart’s most up-to-date forecast, printed in April, requires the state to lose 32,000 jobs this 12 months, with the job losses accelerating because the 12 months goes on.
Whereas Scorsone stated these job losses will happen primarily within the federal sector, he additionally sees a ripple impact.
“Issues like leisure and lodging,” he stated. “As individuals lose jobs, they will spend much less on these issues, [and] perhaps in retail,” he added.
‘Virginia has jobs,’ Governor Youngkin insists
Virginia Governor Glenn Youngkin speaks throughout a particular announcement the place he unveiled a brand new help useful resource package deal for federal staff and promoted Virginia’s over 250,000 open jobs, reaffirming that Virginia is open for enterprise and competing to win throughout the nation, at Capital One’s campus in McLean, VA on February 24, 2025.
Valerie Plesch | The Washington Submit | Getty Photographs
Gov. Glenn Youngkin, a Republican, says the state can soak up these federal job cuts.
In February, the state launched a web page, VirginiaHasJobs.com, focusing on displaced staff with job listings and different sources from throughout the state.
“We have now 250,000 open jobs posted which are unfilled. And so, there’s an important alternative for folk to discover a new alternative, new job, new profession,” Youngkin said on CNBC’s “Squawk Field” on April 15.
A latest verify of the positioning confirmed that the variety of openings has shrunk to 199,000 as jobs have been crammed and personal sector hiring has slowed. That also would seem like greater than sufficient for the federal staff more likely to be displaced. However Scorsone stated it isn’t that straightforward.
“Virginia’s federal workforce is totally different than, say, different states. Our workforce tends to be extremely educated, skilled government degree,” he stated. “Most of the jobs which are open could also be in numerous sectors, like well being care. You possibly can’t simply simply transfer right into a well being care job if that is not your space of experience,” he added.
In his CNBC look in April, Youngkin acknowledged the probability that the state will lose jobs, and that the non-public sector alternate options won’t be a precise match for a lot of displaced authorities staff.
“Pay attention, they are not excellent matches,” he stated. “They’re excessive paying, good jobs that require somebody to presumably get some retraining or re-skilling, or go into a brand new area, however they’re actually good jobs.”
Youngkin stated the funds cuts, and job losses, are crucial. “We have to rein in spending and re-establish fiscal actuality again into the federal authorities,” he stated, including that Virginia goes into the upheaval from a place of power. “We’re seeing report surpluses in our budgets. We’re ready to make use of these surpluses to scale back taxes and put money into schooling and regulation enforcement and different investments in enterprise growth,” Youngkin stated.
Certainly, Virginia remains to be a enterprise powerhouse, with the highest Training rating within the CNBC examine, and the second greatest ranking for Infrastructure.
Over time, no state has carried out higher than Virginia within the CNBC rankings. The state has taken high honors six times because the undertaking started in 2007.
However in 2025, with financial nervousness rising, Virginia’s financial scenario is simply shaky sufficient to take it down just a few pegs.
