Fairfax County has seen a drop in countywide employment since the start of the second Trump administration.
A total of 622,800 jobs were reported across Fairfax in the first quarter of 2026, according to figures reported Aug. 28 by the U.S. Bureau of Labor Statistics. That’s down 2.1% from the first quarter of 2025.
The decline was less, on a percentage basis, than in D.C. and its closer-in Virginia and Maryland suburbs, which have been harder hit by federal government downsizing and its ripple effects across the economy.
Arlington (172,000 total jobs) and D.C. (715,700) each lost 4.5% of all jobs during the one-year period, the highest national declines.
“Within Washington, the largest employment decrease occurred in combined government, with a loss of 25,704 (-11%),” analysts at the Bureau of Labor Statistics said. “Within Arlington, the largest employment decrease occurred in professional and business services, with a loss of 3,563 (-5.6%).”
Among other jurisdictions in the inner core of the D.C. area:
- Alexandria employment declined 2.6% to 79,000
- Montgomery County recorded a drop of 4% to 440,700
- Prince George’s County dipped 2.9% to 320,400
Jurisdictions in the outer suburbs fared better, with Loudoun County seeing an employment uptick of 2.8% to 206,100 and Prince William County recording growth of 1% to 146,400.
The quarterly report counts those employed within localities. It is different from monthly unemployment data, which counts individuals by place of residence, no matter where they are employed.
The data counts workers covered by federal unemployment-insurance programs covering both the private sector and federal government. The quarterly survey of the nation’s 376 largest U.S. counties — and, in Virginia, independent cities — represented just under three-quarters of those covered nationally.
From March 2025 to March 2026, employment increased in just 151 of the 376 communities in the survey. Nationally, employment was up 0.1% to 154.8 million.
Employment declines in the inner Northern Virginia suburbs were part of the reason Virginia’s total employment dropped 0.2% year-over-year for the quarter, to just over 4.1 million.
Among major jurisdictions elsewhere in the commonwealth:
- Chesterfield County: Employment was down 0.7% to 148,300
- Henrico County: Down 0.4% to 190,700
- Chesapeake: Down 0.8% to 106,000
- Newport News: Down 0.7% to 101,900
- Norfolk: Down 1% to 142,200
- Virginia Beach: Up 0.6% to 180,800
Study attributes job challenges to ‘weak hiring’
Overall, Virginia is on track to lose an estimated 18,050 jobs this year, a 0.4% dip in employment that would make 2026 the second consecutive year of contraction for the state’s job market, according to a quarterly economic forecast released today (Wednesday) by the University of Virginia’s Weldon Cooper Center for Public Service.
The research center anticipates that Virginia’s economy will see “modest growth” with a 0.5% increase in gross domestic product for 2026, and employment will start to “gradually” grow again in 2027, but the commonwealth is still trailing the national economy, which is projected to grow its GDP by 2.1% this year.
“The key labor market issue remains weak hiring rather than a wave of layoffs,” João Ferreira, acting director of the Center for Economic and Policy Studies at the Weldon Cooper Center, said in a press release. “A weak hiring environment slows the ability of younger people, recent graduates, and displaced workers to find new positions. That distinction matters for Virginia, where the labor market remains weaker and more volatile than the nation’s.”
More from the Weldon Cooper Center on its new economic forecast:
A shrinking labor force is masking deeper weakness
Virginia’s unemployment rate is projected to hold near 3.9 percent through late 2026, well below the level the Center projected in May. The forecast cautions that this relatively contained figure does not signal a stronger labor market. Instead, it reflects a substantial contraction in the number of people working or looking for work.
The Commonwealth’s civilian labor force declined by nearly 68,000 people between early 2025 and June 2026, a 1.5 percent decrease, and the decline has accelerated in recent months. 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.
“The moderate rise in unemployment conceals a real contraction in the pool of workers participating in Virginia’s economy,” Ferreira said. “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.”
Weakness is spreading across sectors
Job losses have become more broadly distributed across the economy. Professional Services, Manufacturing, Administrative Support, and Accommodation and Food Services continue to shed jobs, and Construction is projected to move from growth into contraction after several strong years. Employment growth in Health Care Services — historically one of the state’s most reliable engines of job creation — is expected to slow considerably, with the sector on track for its weakest annual gain in five years.
Retail, Wholesale, Transportation and Warehousing, Private Education, and Government continue to add jobs, but those gains are not large enough to offset losses elsewhere.
Inflation remains below the national rate but is rising faster than expected
Prices in Virginia are projected to rise by 3.1 percent in 2026, up from the 2.6 percent the Center projected in May, before moderating to 2.5 percent in 2027.
“Virginia’s inflation path continues to compare favorably with the national environment, where prices are projected to rise by 4.0 percent in 2026 and 2.8 percent in 2027,” Ferreira said. “Even so, the upward revision means households and businesses across the Commonwealth will face greater price pressures this year than we previously anticipated.”
Housing shows a bright spot in permitting
Average home values are projected to rise 1.1 percent in 2026 while rents increase 3.4 percent and home sales decline 1.8 percent. The most encouraging change is in new private housing permits, which are now projected to hold essentially flat in 2026 after a 7.8 percent drop in 2025. Stronger-than-expected permitting activity could support greater housing availability over time, though elevated mortgage rates and weaker statewide economic activity continue to constrain the market.
Photo via Campaign Creators/Unsplash
