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Unemployment rose across Northern Virginia in January as federal workforce reductions and contracting changes continued to spread through the regional economy.

Fairfax County recorded the largest year-over-year increase, adding 6,005 unemployed residents. Its unemployment rate climbed from 2.7% in January last year to 3.8%, according to newly released data from the Virginia Department of Workforce Development and Advancement.

Loudoun County’s rate increased from 2.7% to 3.7%, while Prince William County’s rose from 2.9% to 3.8%. Both counties added more than 2,000 unemployed residents over the year.

Despite those increases, the three counties remained slightly below the comparable national rate. U.S. unemployment reached 4.3% in January, up from 4% a year earlier, according to the U.S. Bureau of Labor Statistics.

Keith Waters, assistant director of the Center for Regional Analysis and Stephen S. Fuller Institute at George Mason University’s Schar School of Policy and Government, linked the regional shift to the continuing contraction of the federal workforce.

Waters said employees who accepted a deferred retirement package in October are still working their way through the system. Because those departures are not reflected immediately, the resulting rise in unemployment can appear abrupt.

Federal contractors are also being affected as some government contracts expire without renewal, he said.

Waters expects direct federal employment could recover slightly before the end of the year. Agencies may refill positions they determine are more essential than initially believed.

The housing market has offered a brighter signal, with demand for homes for sale in Northern Virginia proving surprisingly strong, Waters said.

Commercial real estate remains a concern, however. Prolonged weakness in that sector could put additional pressure on property values and eventually affect county budgets.

Fairfax County Executive Bryan Hill acknowledged the increase in unemployment but said the region continues to have substantial hiring activity despite the federal shake-up.

Hill said Northern Virginia still had 66,000 job openings. In his view, the central challenge is connecting displaced workers with available positions that match their skills, rather than an overall shortage of jobs.

Fairfax County is concentrating on helping affected workers recalibrate and learn new skills as federal employment and contracting continue to change, he said.