By Steve Haner

One nice thing about detailed economic prognostication is that the predictions can later be checked and compared to reality. But the grim forecast for Virginia produced recently by the Weldon-Cooper Center for Public Service will have done its political damage long before the results are tallied.

The predictions of job losses and at best a flat state economy for 2026 were highlighted on the Richmond Times-Dispatch front page and gave Cardinal News editor Dwayne Yancey fodder to predict it will hurt Republicans in the coming election. The spin will intensify when Democratic campaign messaging kicks in, with a heavy dose of blame placing on President Donald Trump.

Weldon-Cooper has long been the trusted repository of key economic and U.S. Census data. It has earned quite a bit of brand impact and that is why this report is potent political ammunition.

Weldon-Cooper is new to the economic forecasting game. It started publishing what is planned to be a quarterly analysis in February, “as a useful resource for the good of the Commonwealth.” The rule on economic models is the same as on all the others out there: all models are wrong, but some models are useful. Many economists count themselves as good at predictions if they successfully call four of the next two recessions.

Weldon-Cooper is not displaying any genius in predicting that federal government layoffs and the wave of new tariffs will have a disproportionate impact on Virginia. Virginia is home to major federal agencies, huge federal contracting operations, and a major deep channel port.  

But this new August report is already proving its April report was too pessimistic. The April report predicted Virginia would lose 32,000 jobs overall during 2025 and the August report has already retreated and now predicts 11,700 fewer jobs this year. Too late however — the higher 32,000 figure is already highlighted in Democratic attack ads on Republicans and expect it to stay there despite Weldon-Cooper’s downward revision.

Focused only on federal employment numbers and the possible impact of tariffs, the analysis fails to even discuss whether recent tax and regulatory changes will have any stimulative impact by next year. It ignores other economic forces at work, in particular rising energy costs and the way the AI revolution may be changing the workforce, especially in shrinking professional services. More is going on than federal policy. The report is, in a word, shallow.

Looking at the August report in detail, there are also positive aspects to it that somehow got overlooked, in the Richmond Times-Dispatch in particular. Here is the August summary section from Weldon-Cooper with the ignored aspects emphasized in italics:

•  The economic slowdown will happen later than expected, as Virginia sectors show signs of resilience and many federal measures were postponed or delayed
• Virginia’s GDP will remain in positive territory, but growth will slow
• A contraction in Virginia’s labor market is expected later this year, as employment is expected to decline
• The unemployment rate in Virginia will rise as job losses accumulate
• Inflation in Virginia is below the U.S. average, as Virginia continues to experience a manageable increase in prices

If indeed an economic slowdown materializes, the real question for voters is which set of state policies determined by the election might alleviate or deepen it? Will adding a carbon tax to electric bills help or hurt? What about creating a new multi-billion-dollar state family leave entitlement program and funding it with a new statewide payroll tax? Is there any downside to moving Virginia toward the kind of pro-union environment that dominates other blue state economies? Those are all easy predictions of what follows with Democrats back in charge in January. 

To predict an economic slowdown is coming at some point is like predicting the sun will rise in the morning. The trick is predicting the timing and the depth, and that is the limb Weldon-Cooper has placed itself on. Let’s hope somebody tallies the results in six months or so. It would be best if it published its own scorecard on itself. 

This new effort at predicting the future, however, will have to join several other economic forecasts on the pile when Governor Glenn Youngkin draws up the new state budget for presentation in December. He will also have other more detailed reports from his own staff, from Wall Street firms and then will get input both from other Virginia-based economists and a panel of business executives. 

When those groups do sit down and share their thoughts with the state, they very well might be the same or worse than these conclusions from Weldon-Cooper. They might also be more optimistic. They will certainly be based on additional months of data, including the impact of the coming Federal Reserve actions (or inaction) on interest rates.

But, of course, what they say will not come out until after the smoke has cleared from the election.