Iowa’s unemployment rate falls to 6%

Small businesses such as those in West Des Moines' Valley Junction have contributed to a lowered unemployment rate in Iowa. (Photo by Perry Beeman/Iowa Capital Dispatch)

Iowa’s seasonally adjusted unemployment rate fell to 6% in August as the recovery from the height of the pandemic continued, Iowa Workforce Development reported.

The rate, slightly lower than July’s 6.8%, still is far higher than before the coronavirus pandemic. The spread of COVID-19 forced widespread layoffs, furloughs and in some cases closed businesses. Last year, at this time, Iowa’s unemployment rate was 2.8%, among the lowest in the nation. 

The number of initial unemployment claims dropped 36.7%, to 23,393 from 36,935 in July.

“Thankfully, Iowa’s unemployment rate has continued to decline since our peak month in April 2020, when we saw initial claims of 157,324,” Workforce Development Director Beth Townsend said in a statement. “The sustained decline shows the resilience of Iowa’s economy as we navigate the impact of the pandemic.”

What happens next is up to debate. Republicans and Democrats have been stalemated on plans for another stimulus package, with Democrats talking of $1 trillion to $2 trillion in new aid, and GOP lawmakers resisting.

Creighton University economist Ernie Goss told reporters at a taping of Iowa PBS’ “Iowa Press” on Friday that anything over $1 trillion is going too far.

“I would add in there some relief for unemployed workers,” Goss said. “I think the Paycheck Protection Program also should be part of it. But I would keep it under a trillion dollars.”

Iowa State University economics professor Chad Hart, said he would add aid to state and local governments to Goss’ list. “I also agree that we have to worry about the long-term repercussions here as we’re building up that level to a dangerously high level,” Hart said.

As Iowans react to the fallout of the pandemic, the state’s job site has 60,000 open positions listed, Townsend noted.

Iowa gained 5,300 nonfarm jobs in August, the fourth consecutive monthly rise but far below the 30,700 monthly average of the past four months. 

Iowa Workforce Development analysts reported the slowdown may be because of fall approaching, or sentiment that the return to pre-pandemic business levels will take longer than expected.

Almost half the job growth came in government, where numbers were inflated by census workers, the state reported.

Manufacturing gained 1,600 jobs in August, the biggest jump. Leisure and hospital added 1,500 as bars and restaurants reopened. 

Since April, Iowa businesses have added 97,500 jobs, led by accommodations and food services with 36,200 added.