Virginia and New Jersey may be among the states most affected by the hiring slowdown that enraged President Donald Trump when it appeared in an Aug. 1 jobs report showing the United States had 258,000 fewer jobs than initially reported in May and June.

Such revisions to earlier reports are based on more up-to-date payroll data and are routine. But the scale in this case was shocking — showing the smallest monthly job gains since pandemic-era December 2020 and the largest jobs revision, outside recessions, since 1968.

In response, Trump declared the numbers were wrong, fired the Bureau of Labor Statistics chief, and offered as a replacement E.J. Antoni, a loyalist who has proposed suspending the jobs report. Trump falsely said in a Truth Social post that the revised jobs numbers were “RIGGED in order to make the Republicans, and ME, look bad.”

Beyond those attention-grabbing actions, though, the numbers demonstrate the real effects of Trump’s work slashing the federal government.

A Stateline analysis of the data shows how several states, especially Virginia and New Jersey, shed jobs in the second quarter of this year, which includes May and June.

In Virginia, there were job losses blamed on canceled federal contracts in Northern Virginia as part of cuts made by Elon Musk’s Department of Government Efficiency, known as DOGE. Meanwhile, a slow housing market shuttered a plywood factory in the southern part of the state, and DOGE efforts canceled flooding control contracts on the coast.

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Jay Ford, Virginia policy manager at the Chesapeake Bay Foundation, told a state legislative committee in June that $50 million in contracts were slashed in the Hampton Roads area near the coast, causing a spike in unemployment claims.

That included $20 million to address flooding in Hampton, where almost a quarter of homes are in flood zones, and $24 million to repair a Portsmouth dam that could fail in a major storm, he said.

“This is work that you desperately needed,” Ford said at the committee hearing. “There was a real focus on certain buzzwords like ‘climate’ or ‘resilience,’ and I think people conflated some of these projects as somehow unnecessary.”

For instance, the American Institutes for Research announced 233 layoffs in Virginia in May and 50 in Maryland since the beginning of the year. The not-for-profit organization’s projects include working with school districts to solve achievement gaps and absenteeism, creating AI-driven workforce training, and addressing health care issues such as improving kidney disease care while reducing Medicare costs and strengthening access to health care by keeping rural hospitals open.

“The changes occurring in the federal government have brought significant challenges for many federal contractors, including AIR,” said Dana Tofig, the company’s spokesperson.

Other recent layoffs in Virginia: 442 workers at Northern Virginia’s Mitre, which manages federally funded defense research centers and faced $28 million in canceled federal contracts; and 554 workers at a shuttered plywood factory in Southern Virginia.

“Housing affordability challenges and a 30-year low in existing home sales are impacting our plywood business, as many of our plywood products are used in repair and remodel projects, which often occur when homes change ownership,” Georgia-Pacific said in a May news release.

Stateline looked at two state jobs surveys for the second quarter that sometimes have quite different results: the so-called payroll survey of businesses that the Bureau of Labor Statistics uses for its monthly report, which has yet to be revised at the state level, and the BLS Local Area Unemployment Statistics program, which estimates job changes based on monthly household surveys.

The LAUS estimates are often called the “household” survey because they rely mostly on surveys of households, asking how many people are employed. They include jobs the payroll survey can’t get, such as contract and agricultural jobs, and capture jobs where people live rather than states where employers are located.

In a state like Virginia with a high number of federal employees and contract workers, lost jobs may show up sooner in the household survey since many federal jobs are not reflected on state-level payrolls if they are done by subcontractors, if the agency or contractor is based in another state, or if DOGE cuts allowed people to stop work but stay on the payroll until September. Those people might report being unemployed in the household survey but wouldn’t show up in other surveys until October.

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The household survey shows about the same number of slowing job gains as the revised national payroll report, so it may be a window into the trends, many caused by Trump administration cuts in government, health care and foreign aid, and also by slowing sales in stores and housing markets.

Both surveys rely on small samples and are often revised later, said Charles Gascon, an economist and research officer at the Federal Reserve Bank of St. Louis. The more definitive Quarterly Census of Employment and Wages, set for release Dec. 3 for the second quarter, will show state patterns more conclusively, he said.

The household surveys show Virginia with the largest job losses in the country for the second quarter, down about 43,000, and job losses every month since February. Before that, the state gained jobs every month since the height of pandemic job losses in April 2020.

New Jersey, which had the most job losses — 15,400 — in the separate second-quarter payroll survey, has suffered layoffs in retail stores hit by a slowdown in consumer spending, increased shoplifting and, among drugstores, lawsuits for their role in the opioid epidemic.

Walmart announced 481 layoffs at its Hoboken, New Jersey, corporate office, and Rite Aid drugstores laid off 1,122 amid Chapter 11 bankruptcy affected by opioid crisis lawsuits that also hit Walmart and other pharmacy chains. Pharma firms Bristol Myers Squibb and Novartis also have announced hundreds of layoffs in New Jersey, citing patent expirations on popular drugs.

Wobbly state finances

Rising unemployment combined with weak revenue growth suggests “economic fragility” for state finances, said Lucy Dadayan, a principal research associate for the Urban-Brookings Tax Policy Center who tracks state tax revenue.

Nationally, unemployment was at 4.2% in July, the same as July 2024 but up from recent lows of 3.4% in April 2023, with the largest increases in Mississippi, Virginia and Oregon.

Unemployment has dropped the most compared with July 2024 in Indiana, Illinois, New York and West Virginia.

The states with the highest unemployment rates in July were California (5.5%), Nevada (5.4%) and Michigan (5.3%), while the lowest were in South Dakota (1.9%), North Dakota (2.5%) and Vermont (2.6%).

“I think the dramatic May and June jobs revision signals economic fragility. State-level warning signs suggest the impacts will show gradually,” Dadayan said. “And of course states are facing fiscal challenges caused by One Big Beautiful Bill Act tax and spending decisions.”

State finances are a mixed picture, with income tax collections rising because of a strong stock market and sales tax growth weak as consumers retreat on spending, Dadayan said.

In Virginia, the economically distressed area around Emporia will suffer aftershocks from the plywood plant closing, said Del. Otto Wachsmann, a Republican who represents the area in the state House of Delegates. The area is already reeling from the indefinite closure of a nearby Boar’s Head lunch meat plant that employed 600 people after a listeria outbreak there last year.

The community, part of the southern “Wood Basket” region, has a large logging industry that will now struggle to find new markets farther away with higher costs for trucking, Wachsmann said. “We’re working hard to find new industries to come here.”

Layoff rates in April, as calculated by the online human resources platform Techr, showed New Jersey, Vermont and Virginia with the highest rates.

Amanda Goodall, a workforce analyst who calls herself “The Job Chick” on social media, said the layoffs reflect restructuring in major corporations as well as federal cutbacks. She wrote about the layoff rates in a recent post.

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“These are not statistical flukes. They reflect real corporate moves, in New Jersey and Virginia especially,” Goodall wrote in an emailed statement to Stateline. “The bigger issue is that nobody on the ground cares what the unemployment rate says if they can’t find an interview for a job they’re qualified for. State layoff figures are giving us an early read.”

California and Texas

California and Texas saw the biggest jobs gains in both surveys in the second quarter.

Texas added 42,700 jobs in the payroll survey, with the largest increase coming in the category of private educational services, 14,400 jobs, as the state approved a plan for school vouchers to start next year, according to a statement to Stateline from the Texas Workforce Commission.

California added 25,300 jobs. But the household survey showed an increase of almost 111,000 jobs, the highest in the country.

A Public Policy Institute of California blog post in July called the state’s labor market “at best, in a hold-steady pattern this year,” citing the state’s stubbornly elevated unemployment rate of 5.4% but also its jobs improvement over last year.

“A hold-steady pattern is a welcome change from a year ago,” said the post, written by Sarah Bohn, a senior fellow at the institute.

Stateline reporter Tim Henderson can be reached at thenderson@stateline.org.

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

Steve Whalen loves his home state of Delaware and he’s proud to manufacture computers there that police officers use to “catch bad guys.” He said tariffs on imports from China and other countries, along with sharp cuts to government spending and the winding down of a program for small manufacturers, will make it harder for him to do that.

“We got into business to keep costs low for the ‘good guys,’ but tariffs or anything else that raises prices keeps us from doing that,” said Whalen, co-founder of Sumuri LLC in Magnolia, Delaware, which makes computer workstations for police and government investigations. Whalen has to buy materials overseas, often from China, and he said the tariffs could force him to triple his price on some workstations to $12,000.

Tariffs are the main tool President Donald Trump is wielding to try to boost manufacturing in the United States, calling the achievement of that goal “an economic and national security priority.” But the higher levies have led to retaliation and suspended shipments, and Whalen said they are just one of several Trump administration actions squeezing his small manufacturing business.

The wave of federal spending cuts, which has affected grants to state and local governments, could make his customers put off purchases. And the administration has moved to cut off funding for a $175 million state-based program that provides expert advice to smaller factories like his.

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The Delaware version of that program, the Manufacturing Extension Partnership, helped Sumuri fit expanded product lines into the limited space in its small-town factory.

“We were really having a tough time trying to figure out how to utilize our space efficiently,” Whalen said. “They came here and helped us organize and optimize, and it made a huge difference.”

On April 1, the Trump administration cut off funding for 10 such manufacturing programs that were up for renewal in Delaware, Hawaii, Iowa, Kansas, Maine, Mississippi, Nevada, New Mexico, North Dakota and Wyoming. Other state MEP programs will expire over the next year.

The administration gave a reprieve to those 10 states until the end of the fiscal year after objections from Democrats in the U.S. House and Senate. The National Institute of Standards and Technology, which manages the program, extended funding for the 10 states “after further review and consideration” and will “continue to evaluate plans for the program,” said agency spokesperson Chad Boutin.

The program has come under fire from Republicans since the George W. Bush administration first tried to end it in 2009, and again during the first Trump administration, but Congress has continued to fund it. The conservative Heritage Foundation said in a 2023 book that MEP’s functions “would be more properly carried out by the private sector.”

‘Dots don’t quite connect’

Buckley Brinkman, executive director of the Wisconsin Center for Manufacturing and Productivity, which works with his state’s MEP program, said it didn’t make much sense for the administration to shutter the program as it seeks to boost the number of U.S. manufacturing jobs.

“It’s one of those things where the dots don’t quite connect,” Brinkman said. “I mean, jeez, here’s a part of government that doesn’t cost a whole lot, in the grand scheme of things — less than $200 million a year — that’s returning 10-to-1 to the national treasury, working on a priority for the president.”

A 2024 Upjohn report found an even higher return: 17-to-1 on $175 million in the 2023 fiscal year, creating $3 billion in new federal tax revenue.

In Wisconsin, which has lost more than 138,000 manufacturing jobs since 2000, some parts makers report that business is booming as manufacturers seek to avoid tariffs by finding U.S. alternatives to Chinese manufacturers, Brinkman said. But more broadly, he doubts that the tariffs will spark a manufacturing boom in the state.

“Do we want all this manufacturing back? Do we have the will to get it back? The answer to both those questions is ‘no,’” Brinkman said. “Even without the tariffs we don’t really want Americans doing a lot of those jobs that are in Chinese factories right now.”

In Delaware, the MEP helped Sumuri manage its expansion, but unpredictable tariffs and budgets are now a bigger danger, said Jason Roslewicz, Sumuri’s vice president of business development. He’s had to devote two employees to monitoring supply lines, tariff news and competitor pricing to stay afloat.

“We went from putting things together in a basement to a 19,000-square-foot facility, doing exactly what we’re supposed to do here in the U.S., and it’s all in danger of coming apart because of this problem,” Roslewicz said.

Other small manufacturers express similar concerns. TJ Semanchin, who owns Wonderstate Coffee in Madison, Wisconsin, said his business roasting and distributing coffee is in crisis because of the tariffs.

Wonderstate’s costs have almost doubled between tariffs on imported coffee and packaging materials from China, plus a cyclical rise in coffee prices. “I’m borrowing money to pay for this and at some point we’ll have to raise prices. We’ll have no choice,” Semanchin said.

But many Republican state officials, and even some Democrats, have backed Trump’s tariff push, including Virginia Republican Gov. Glenn Youngkin, who credited the Trump administration with “reshoring manufacturing and restoring this middle class which has been eviscerated over the last 20 years.”

“There’s dislocation in the short term, there’s long-term opportunity,” Youngkin said in an April 15 interview on CNBC. He said his state is hearing more interest from manufacturers looking to build or expand local factories since Trump took office. For instance, Delta Star recently announced a plan to add 300 jobs building power transformers in Lynchburg.

“The president has been clear that there will be some level of tariffs, and folks are coming, and that’s good for Virginia,” Youngkin said in the CNBC interview.

Virginia’s MEP program, called Genedge, claims successes in streamlining production and quality control for local factory products including TreeDiaper, an automated tree watering device made in Ashland, and for advising EDM, a Lynchburg plastic product assembler that needed more efficient production to keep overseas competition at bay. But Virginia’s MEP is one of the state programs slated to expire in the next year.

Long-term trend

The slide in U.S. manufacturing jobs has continued on and off since 1979, and many experts say tariffs will not bring them back. Despite a modest bounce back under the Biden administration, the number of manufacturing jobs has declined from nearly 20 million in 1979 to less than 13 million today, even as the total U.S. workforce has grown from 89 million to 159 million during that period.

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Manufacturing faces labor shortages, with many factories operating below capacity because they can’t find enough workers, according to Jason Miller, a professor of supply chain management at Michigan State University.

That doesn’t bode well for a mass reshoring of factories from China and other countries, but Miller doesn’t expect that to happen anyway.

“Firms are not planning on reshoring much of the work that was offshored 20 to 25 years ago,” Miller said. “I’m not concerned about having enough workers for manufacturing jobs that would be reshored because this isn’t going to happen.”

In a 2024 survey by the libertarian Cato Institute, 80% of Americans said America would be better off if more people worked in manufacturing, but only 25% said they personally would be better off working in a factory. The Chinese government has poked fun at the idea with memes of American workers struggling to make Nike sneakers with sewing machines.

Joseph McCartin, a labor historian at Georgetown University, said the idea of a manufacturing rebirth is a “mirage being conjured to attract the support of workers who have been underpaid in an increasingly unequal economy for the last 40 years, and are desperate for some hope of renewed upward mobility.”

Manufacturing “isn’t the magic wand to make that happen,” McCartin said.

“What we need is to raise workers’ wages and make the economy less prone to producing inequality,” McCartin said. “That mission is not at all what Trump is about. He is dealing in stale nostalgia.”

Stateline reporter Tim Henderson can be reached at thenderson@stateline.org.

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

A major U.S. Supreme Court decision this summer was hailed as a conservative court’s broadside against a Democratic administration, giving red states more backing to delay or overturn policies they don’t like, such as transgender protections and clean energy goals.

But the ruling in the Loper Bright case, which granted courts more power to scrutinize federal rules, can go both ways. Experts say it will likely give blue states more leeway to attack any forthcoming policy changes from President-elect Donald Trump — ranging from immigration and the environment to Medicaid and civil rights.

The decision overturns a legal concept called “Chevron deference,” in place since 1984 and named after a case involving the Chevron oil company. That ruling granted federal agencies wide discretion in interpreting vague laws that had been passed by Congress and sent to the executive branch to sort out the details. Generally, courts deferred to the agency regulations.

Chevron deference became a superstar of the courts, cited in more than 18,000 federal court decisions.

The latest ruling wipes that all away. Experts said it will boost blue-state resistance to Trump policies. Lawsuits already are being planned in many statehouses, as California holds a special session to set aside money for legal fights, and other states such as Connecticut, Massachusetts, Minnesota, New Jersey and New York also talk court strategy. Democratic governors in Colorado and Illinois formed a coalition in November to “fortify essential democratic rights nationwide.”

In effect, the ruling opens more federal rules to those court challenges. Blue states now have a new weapon to fight conservative federal rules on issues such as immigration, climate change, abortion access and civil rights.

Ironically, the original 1984 decision establishing more power for federal agencies was made by a conservative court that was paving the way for deregulation in the Reagan administration, noted Leonardo Cuello, a research professor at Georgetown University’s McCourt School of Public Policy’s Center for Children and Families.

“It was a case that really opened the door to Reagan deregulation, sort of untying the hands of the [federal] agencies by saying, ‘We’re going to give you a lot of slack to start doing things,’” Cuello said.

“Fast-forward to today, and overturning Chevron really has the opposite effect,” Cuello said. “You’re handcuffing the new [Trump administration] agency from deregulating.

“It makes it hard for an agency to build out new things and it makes it hard to undo existing things,” he said. “There’s some irony to the fact that a conservative majority issued that ruling just before a conservative administration took office.”

Trump appointed three of the six justices who supported the decision.

Some Trump allies still see the ruling as a weapon against excessive regulation. Vivek Ramaswamy, chosen by Trump alongside tech billionaire Elon Musk to lead an advisory body the president-elect named the Department of Government Efficiency, said in a December post on X that the decision “paves the way for not a slight but a drastic reduction in the scope of the federal regulatory state.”

But most experts see the change as an obstacle to a new Republican administration looking to make sweeping changes but lacking enough support in Congress to pass large-scale legislation. Any proposals restricting access to abortion or attempting to dismantle the Affordable Care Act or Medicaid expansion will be more complicated, said Zachary Baron, a director of the Center for Health Policy and the Law at Georgetown University’s O’Neill Institute.

“All these new policies are going to be challenged in court, and state attorneys general will certainly be leading the way.” Baron said. “I think there will be a lot of big legal fights to come.”

Now, it could become harder for a Trump administration to deregulate areas of the economy, crack down on immigration, impose work requirements on Medicaid recipients, or remove protections for gender and LBGTQ+ status. The Biden administration similarly has run into roadblocks.

“We have already seen conservative judges point to Loper Bright as one reason to block the Biden administration’s efforts to expand the reach of nondiscrimination protections, including with respect to LGBTQ+ folks,” Baron said.

For instance, federal courts in Florida, Mississippi and Texas — in response to lawsuits brought by various Republican states — prevented an Affordable Care Act rule banning gender identity-based discrimination from taking effect in July. Each ruling cited Loper Bright as one factor.

With Trump’s election, it’s now blue states that have a sharper tool to combat Republican agendas.

“To the extent that the Trump administration tries to radically rewrite these nondiscrimination protections again, he may well find that Democratic state AGs [attorneys general] will be able to successfully block such efforts as a result of Loper Bright also,” Baron said.

Congress has not approved a major immigration or environmental law for decades. That has forced both Democratic and Republican administrations to change policy through either executive order or federal regulations that can now be more easily challenged by hostile states in the courts.

“If you like the administration that’s advancing policies, then Loper Bright is not a good thing for what would happen when states challenge those policies,” said Nancy Morawetz, a New York University law professor who helps run an immigrant legal clinic, speaking at a September conference on immigration law.

Trump’s election does not change that, Morawetz told Stateline later.

“If the administration is anti-immigrant, Loper Bright provides stronger grounds for having a court look at whether it is breaking the law,” Morawetz said. “The executive branch gets less deference.”

The court’s decision may also help immigrants themselves when they go to court to challenge federal policies on deportation and legal status, Morawetz said.

Red states looking to enact Medicaid work requirements under a more amenable Trump administration also might be thwarted by the Loper Bright decision, Cuello said. The first Trump administration lost every court challenge when it granted state requests for work requirements, he said, and Loper Bright will make it even harder this time.

“Even with the more generous standards granted to the agency [under the previous Chevron deference], those cases got shot down, and so now you would expect they’d be even more likely to be shot down,” Cuello said. “The win is harder.”

The Loper Bright decision could also hamper promised efforts by a Trump administration to unwind environmental regulations, by making it easier for blue states to challenge any changes. That would flip the script from today’s lawsuits, in which red states are fighting the stricter regulations of coal-fired power plants.

Red states have also fought new Biden administration vehicle pollution standards, and Trump allies have threatened to undermine scientific integrity policies seen as preventing deregulation by shielding scientists from political interference.

The Loper Bright decision went 6-2 in favor of New Jersey herring fishermen who opposed a 2020 federal rule requiring them to pay salaries for the third-party observers on their boats who were there to ensure compliance with regulations. The fishermen argued that the cost, up to $710 per day, had no legal justification and cut their family profits by 20%.

Lower courts ruled against the fishermen, saying the often-cited Chevron deference principle did not allow them to challenge the federal rule. The Supreme Court struck down the principle, ruling that courts are required “to exercise their independent judgment” on federal rules.

“Agencies have no special competence in resolving statutory ambiguities. Courts do,” Chief Justice John Roberts wrote.

In a dissenting opinion joined by liberal justices, Associate Justice Elena Kagan called the deference to agency interpretations “part of the warp and woof of modern government, supporting regulatory efforts of all kinds … keeping air and water clean, food and drugs safe, and financial markets honest. And the rule is right.”

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org. Follow Stateline on Facebook and X.

New Jersey Monitor is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. New Jersey Monitor maintains editorial independence. Contact Editor Terrence T. McDonald for questions: info@newjerseymonitor.com. Follow New Jersey Monitor on Facebook and X.