Va. unemployment rate accelerates, hits 17-year high

Virginia’s jobless rate in January rose to its highest level in nearly 17 years as an increasing number of the state’s employers laid off workers as the recession worsened.

The rate jumped a whole percentage point—to 6 percent on a seasonally adjusted basis from 5 percent in December—according to a U.S. Labor Department report on state unemployment.

“That is a pretty spectacular month-over-month increase,“ said Dean Croushore, associate economics professor at the University of Richmond’s Robins School of Business.

Year to year, Virginia’s jobless rate for January was 2.6 percentage points higher than the 3.4 percent rate recorded for January 2008.

The rate hasn’t stood at 6 percent since September 1992. It was 6.4 percent in January 1992.

The concern for some economists is how quickly the monthly rate has changed in Virginia since last fall. The figures increased slightly each month for much of last year, but the pace began to accelerate in October, when the rate was 4.3 percent.

“I don’t think the level of the unemployment rate is as important as the rapid speed of change,“ said Christine Chmura of Chmura Economics & Analytics in Richmond.

The percentage-point increases in Virginia’s unemployment figures follow the national rate, Croushore said. The U.S. jobless rate rose 2.7 percentage points to 7.6 percent in January from January 2008.

In February, the national unemployment rate leapt to 8.1 percent.

“That’s the bad news for Virginia, [because] we are pretty much following the country as a whole,“ said Croushore, also the interim director of a data-research center at the Federal Reserve Bank of Philadelphia.

John A. Challenger, chief executive officer of the Chicago-based job placement firm Challenger, Gray & Christmas, said the big jump from December to January in Virginia shows how the recession is spreading across the state.

“It tells you just how tough the times are: Even the areas of the economy that have been insulated from the effects of the recession are becoming more vulnerable,“ Challenger said.

“Based on the reaction of consumers to the unemployment rate, it has gotten to the critical level,“ Chmura said. “The consumer has basically stopped spending for fear they will be the next ones to lose their jobs.“

William F. Mezger, the chief economist for the Virginia Employment Commission, said the jobless numbers are up because of the deteriorating economy. “This is the same pattern we have seen since the fall,“ he said.

The commission has not released the January unemployment rates for the metro areas and for each of Virginia’s counties and cities. Those numbers should be released within the next couple of days, Mezger said.

Contact Gregory J. Gilligan at (804) 649-6379 or .