Furloughed federal workers are beginning to seek unemployment in Virginia, with more than 900 claims related to the government shutdown filed during the first two weeks of October.
That’s according to preliminary data from the Virginia Employment Commission — the claims are subject to a wage verification process through the federal government. In Virginia, 1,250 claims identified a federal employer and more than 900 were related to furloughs.
Tuesday marks three weeks of the federal government shutdown, tied for the second-longest in modern history. The longest shutdown lasted 35 days from late 2018 to early ’19.
Nationally, at least 600,000 people have been furloughed as a result of the shutdown. About 475,000 federal employees reside in Virginia, though it’s unclear how many are furloughed and how many are working without pay. Workers who receive unemployment insurance are required to pay it back if they eventually receive backpay from the federal government.
Active duty military members were paid last week after the Pentagon tapped $6.5 billion in unspent research and development funds to cover the cost. It’s unclear whether that will happen again as the shutdown continues.
State employees whose salaries are funded at least in part by federal dollars could be impacted as well. Last week, Virginia Works furloughed 13 employees. Other state agencies, which employ about 7,000 workers supported by federal funds, said they had between two weeks and 90 days of funding available before taking steps such as furloughs or program interruptions.
Last week, the Weldon Cooper Center for Public Service at the University of Virginia released its quarterly economic forecast for the commonwealth.
The report found that employment growth is expected to be slow for the remainder of 2025, though the monthly jobs report for September was delayed as a result of the shutdown.
“Historically, Virginia has been very similar to the nation, or maybe even better than the nation,” Eric Scorsone, executive director of the Weldon Cooper Center, said of the commonwealth’s economy. “What we’re seeing now is Virginia sort of underperforming the nation, at least for the time being.”
The report also projected continued growth in unemployment in Virginia through next summer. Historically, Virginia’s unemployment rate has been below the national average, but the report found that the gap could close, as the state’s unemployment rate is projected to climb to 4.1% by December of this year and to 5.0% in mid 2026. Nationally, the unemployment rate is expected to rise to 4.4% in 2025 and 4.8% in 2026.
“That’s not great,” Scorsone said. “That’s almost a doubling of the unemployment rate from say, last summer. But also, we should keep in mind from a bigger, longer-term perspective that unemployment was probably in the 9 to 10% range in the Great Recession, in 2008, 2009.”
That’s a less pessimistic estimate than previous forecasts. The changes, Scorsone said, are a result of things like tariff policies being announced and then delayed. And, where economists at the Weldon Cooper Center projected very little growth in the construction and health care industries, those sectors have remained resilient.
Virginia Works last week reported 4,378 initial unemployment claims filed during the week ending Oct. 11. The number of continuing unemployment claims was 18,892.
But impact of the shutdown on Virginia’s economy and on consumer habits remains unknown. It’s not clear, for example, if people in Hampton Roads are cutting back on spending for discretionary items. And the shutdown means more data lags.
“Ironically, it’s the shutdown itself that’s causing the data delay to understand the shutdown,” Scorsone said. “The longer this goes on, obviously the bigger impact it could have.”
Kate Seltzer, 757-713-7881, kate.seltzer@virginiamedia.com
