Cooper Center Releases April 2025 Economic Forecast for Virginia
April 29, 2025—Today the Weldon Cooper Center for Public Service released its second economic forecast for the Commonwealth of Virginia.
Each quarter, the Cooper Center’s Economic Forecast updates major economic trends and focuses on key indicators such as employment growth, inflation, unemployment rates, GDP expansion, and government employment. Beyond tracking Virginia’s economic trends from 2024 to 2050, this advanced model places these trends within the broader national context, helping Virginia’s civic leaders compare the state's economic trajectory with the rest of the country.
KEY FINDINGS FOR 2025
• Virginia’s labor market is contracting—employment is expected to decline throughout 2025, bucking the national trend.
• The unemployment rate in Virginia will rise as job losses accumulate and will reach its highest rate since 2021.
• Despite the national trend, Virginia continues to experience lower price growth than the U.S. average.
• Even with labor market strain, Virginia’s GDP will remain in positive territory, driven by productivity gains and sectoral resilience—but growth will slow.
• The economic slowdown is steeper and more persistent in Virginia than anticipated, with signs of continued weakness across multiple sectors.
Regular economic forecasts are especially important in periods of policy changes and economic shifts. This is especially true in Virginia, which relies on federal jobs more than nearly any other state.
Virginia’s labor market outlook for 2025 reflects a broad-based slowdown. After several years of moderate expansion, almost every major sector is projected to shrink or stagnate, with only a few exceptions. This contrasts sharply with the average annual growth observed between 2014 and 2024.
“In January and February, Virginia lost jobs while national employment grew,” said Cooper Center Executive Director Eric Scorsone. “Between federal force reductions and the loss of federal contracts, Virginia is expected to lose 32,000 jobs in 2025, a 0.8% decline from 2024. More than 9,000 of those jobs are government employment.”
Job losses will translate into a higher unemployment rate, edging up to an average of 3.9% this year and 4.7% in 2026.
Created by a team of Cooper Center economists— including Scorsone, João Ferreira, Terry Rephann, and Matt Scheffel—the forecast draws on thirty diverse data sources to tailor Virginia-specific estimates. Economic forecasts are inherently sensitive to changes in national and state-level policies, which can have unpredictable consequences on business conditions, public budgets, and labor markets. As such, projections presented here are subject to revision and will increase in accuracy as new data becomes available and recent trends are better understood.
To download the complete report, visit https://www.coopercenter.org/va-econ-forecast. For media inquiries, email arebhorn@virginia.edu.
