NORTON, VA. -- Unemployment took a nosedive in Virginia's coalfields, and a smaller labor force may partially explain the improvement in what remains a sluggish economy, a state official said last week.

"First of all, the civilian labor force is seeing a decrease in a lot of our counties," said Gary Hale, manager of the local Virginia Employment Commission office.

"At the same time, in most places, there are more people working and less people unemployed. We've dropped from a 13.7 percent unemployment rate in December of '86 to 8.5 percent in December of '87," Hale said.

He said the economy in the seven coal counties and the city of Norton may continue to improve gradually, and the chance of that happening will be greater if the rank and file of the United Mine Workers ratifies a new contract today.

The coalfields had been bracing for a strike, but the UMW and members of the Bituminous Coal Operators Association agreed on a new pact on Jan. 30.

But the fate of companies in the Pittston Coal Group Inc., which is not part of the BCOA, remained uncertain. Miners were told to keep working while Pittston studied the BCOA contract.

"At this point, the way things seem to be going is encouraging," Hale said. "They're working. They're not on strike."

He said there has been a slight rise lately in coal employment, but that accounts for only part of the increase in coalfield employment from 73,047 at the end of 1986 to 75,470 at the end of 1987.

"We've seen some pickup in the coal here in the last few month -- nothing dramatic," Hale said. "I would say the majority of our pickup has been in the retail business."

Unemployment from 1986 to 1987 dipped from a total of 11,638 to 6,990, Hale said, adding that the figure may have been aided by a shrinking work force. The official numbers of the work force become smaller when people either leave the area or give up looking for work. Over the last year, the coalfield civilian work force dropped from 84,685 to 82,460, Hale said.