Downward unemployment trend in Virginia slows as continued restrictions hurt businesses

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Virginia’s unemployment rate had been decreasing since Gov. Ralph Northam eased COVID-19 restrictions, but the most-recent numbers show that trend could be slowing, which is concerning to members of the business community.

September’s unemployment numbers, which the state released this week, show a 0.1 percentage point increase in seasonally-adjusted unemployment – a reversal from the previous month’s numbers, which showed a 1.8 percentage point decrease. The commonwealth’s 6.2% unemployment rate still is below the national average, which is 8.4%.

In the week ending Oct. 16, Virginia’s initial unemployment claims saw a jump of 2,255 claims from the previous week, up to 11,365 claims. Continued claims stayed on their downward trend, seeing a 9.1% decrease to 129,300 from the previous week.

The trends concern business advocates, many of whom say the continued economic restrictions and the lack of additional COVID-19 relief money from the federal government are contributing factors.

Robert Melvin, the director of government affairs at the Virginia Restaurant, Lodging & Travel Association, told The Center Square he is not surprised. He said businesses are struggling to keep people employed because the economic restrictions are hurting revenue and their federal COVID-19 relief funds are running out.

Without federal funds, Melvin said the governor should consider easing some of the restrictions while maintaining smart rules that will help stop the spread of COVID-19. He said the state should reduce certain hospitality restrictions, such as allowing socially distanced bar seating and raising the gathering threshold so hotels can host events.

Melvin said in the upcoming colder months, restaurants and other businesses may face serious economic problems because they will be unable to hold events outside.

Nicole Riley, Virginia state director for the National Federation of Independent Business, told The Center Square said the trends show the economy still is in a fragile state. In a national NFIB survey of its members, 43% of businesses said they would reapply for federal COVID-19 money if it were made available. Another 30% said they would consider reapplying.

Riley said safety is the main concern for NFIB members and Northam should use data to make smart decisions about restrictions. However, she said the governor needs to use common sense on restrictions because without additional COVID-19 relief, some business may face economic hardships and be forced to shut down for good.

Some health experts believe COVID-19 cases could spike in the colder weather. To give Northam more flexibility in enforcing his restrictions, the General Assembly passed legislation that allows the state to levy civil fines up to $500 for violating his executive orders. Republican lawmakers and members of the business community have expressed concern that the governor may beef up his enforcement in light of this legislation.

Melvin said only time will tell if there is a spike and the governor should not take harsh pre-emptive action that could cause problems for businesses.

“That would be devastating,” Melvin said.

The Center Square reached out to the governor’s office and the Virginia Employment Commission for comment, but neither responded.

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