Economists at the University of Virginia predict unemployment will rise this year to 4.4%. Joao Ferreira, acting director of the Center for Economic and Policy Studies, says job growth is already down.
“Consulting, technical and professional services we started seeing a decline, and last year Virginia closed the year mostly with stagnation and not with the creating of jobs.”
In the fourth quarter of 2025, only three sectors saw strong growth: construction, linked to data centers, transportation and healthcare. The latter, he says, could take a dive due to cuts in federal programs like Medicaid.
“I’m not saying no. In fact, we predict for 2026 that the healthcare service will not create as many jobs as were created in 2025, so there will be a slowdown – definitely.”
He says rents will continue to rise in 2026 as will the price of power.
“And this is because of the impact data centers are having – they are escalating our energy demand. Dominion is already projecting that the next step prices can go up 5-6-7% a year depending on the scenarios.”
But, he adds, we are not yet in recession, because gross domestic product – the value of goods and services produced here – is still growing.
He says, the arts, entertainment, lodging and food service are suffering. Fields that depend on federal funding – like government, scientific and technical services – have also slowed.
“One of every 8 eight dollars spent by our government on contactors is in Virginia.”:05
But the center predicts economic improvements in 2027.
