- Associated Press - Thursday, July 15, 2010

RICHMOND, Va. (AP) — Virginia has added nearly 72,000 jobs the past five months as it struggles to emerge from 2010 unemployment levels that are the worst since the early 1980s.

Gov. Bob McDonnell said Thursday that the 71,500 jobs had been created since February, the same time the state unemployment rate has hovered just above 7 percent.

About one-tenth of the jobs resulted directly from state economic development efforts, he said, and about 80 percent were created by private businesses.

“We have hundreds of thousands of Virginians now who can’t find a job, and that’s unacceptable,” said Mr. McDonnell, who was elected resoundingly a year ago on a pledge to be a relentless jobs recruiter.

Substantial employment growth during the next year is not only critical to Mr. McDonnell politically, it’s crucial for the state to meet its revenue targets for the 2011 budget. Income taxes withheld from paychecks account for about two-thirds of the state’s general operating budget, underwriting core services such as public education, health care and social services, and public safety.

Mr. McDonnell estimated that perhaps 14,000 of the jobs could be linked to the economic jolt the federal stimulus package provided as a result of programs such as highway construction that spun off private sector employment.

“There certainly has been some short-term, salutary effect of the stimulus. How much? Hard to say,” the Republican governor who was sworn in six months ago said of the economic recovery package adopted by a Democratic Congress and President Barack Obama.

Compared to other states, Virginia’s economy has weathered the worst economic downturn since the Great Depression well. The state’s present seasonally adjusted unemployment rate of 7.1 percent compares with a nationwide rate of 9.7 percent, and it is the 13th lowest in the nation. Virginia’s per capita job growth rate since January ranks third nationally, behind Maryland and Delaware. On Tuesday, CNBC ranked Virginia as the second-best state for business nationally behind Texas. Until then, Virginia had been ranked No. 1.

“But there’s no question we’ve got a deep hole to crawl out of,” said Lt. Gov. Bill Bolling, who doubles as McDonnell’s “chief jobs-creation officer,” a cabinet level post in the administration.

The deep national recession swung Virginia’s seasonally adjusted unemployment rate from just under 3 percent in 2006 and early 2007 to four consecutive months above 7 percent beginning in February of this year. The last time unemployment topped 7 percent in Virginia was in 1982-1983, according to data from the Virginia Employment Commission.

The number of unemployed in the state soared from nearly 117,000 in May 2007, when the rate was 2.9 percent, to nearly 299,000 in May, when it hit 7.1 percent. An Associated Press analysis of VEC figures dating through 1976 shows that Virginia’s highest jobless rate is 7.8 percent, a mark reached in December 1982 and January 1983.

Nearly one-third of the new jobs created since February came in the Washington, D.C., suburbs of northern Virginia, the state’s most populous area. Two regions hit hardest by joblessness the past decade — Southside and southwestern Virginia — account for 18 percent and 15 percent of the new jobs, respectively. Hampton Roads got 14 percent of them, the Shenandoah Valley got 13 percent, and the central region, including Richmond, got 10 percent, McDonnell’s office said.