State and regional data in the first quarter 2009 edition of the Virginia Economic Trends show the depth and breadth of the recession which has taken a firm hold on Virginia’s economy. The state lost over 30,000 jobs in 2008 and the unemployment rate jumped from 3.2% to 5.4% over the year. The increase in initial unemployment claims was accelerating at the end of the year, indicating further weakening in the labor market. Among the metro areas, Danville had the highest unemployment rate (13.1% in December) while Winchester recorded the largest job loss (-2.0% over the 2008 calendar year) as well as the largest drop in retail sales (-9.7% over the same period).

The Winchester metropolitan area boomed from 1996 to 2006, averaging 2.9% annual employment growth over those years compared to 1.7% in Virginia. This fast growth has been turned on its head in the current recession, however, with Winchester showing signs of being hit worse than the state. Building permits have fallen farther in Winchester (-81.7% from peak to trough) than in any of the other state metros. Retail sales have also plummeted in Winchester, dropping 19.2% from May 2006 to December 2008. Over the year ending December 2008, Winchester employment dropped 2.0%, equivalent to a loss of 1,149 jobs. (The Chmura benchmark series estimates that regional employment fell 2.4%.) State employment declined 0.8% over the same period.