Iowa Jobs Fall; Jobless Rate Hits 5.1 Percent
Iowa Policy Project

MOUNT VERNON, Iowa (March 17, 2005) – Iowa’s shaky economic recovery took an employment dive in January, falling by 3,600 nonfarm jobs as the unemployment rate rose to a nearly 17-year high of 5.1 percent.

The unemployment rate, its highest level in Iowa since February, 1988, rose from a revised 5 percent in December and 4.6 percent in January 2004. The nonfarm job number was up by 10,600 over January 2004.

“That is really slow job growth for a year, especially when compared with levels before the 2001 recession and even the revised December figures. This is a setback from what already was a slow pace in regaining jobs lost during that recession,” said David Osterberg, executive director of the nonpartisan Iowa Policy Project (IPP).

The one-month 3,600-job decline for January compares with a revised 2004 average of about 1,300 per month – and keeps the state 15,800 jobs behind the level from the March, 2001, start of the last recession. To erase that job deficit in 2005, Iowa will need an average monthly gain of more than 1,400 nonfarm jobs from February through December.

Osterberg noted comments from Iowa Workforce Development Director Richard Running that the economy’s performance “was still too weak to take up the slack left over from the jobless recovery.”

“We share the view that this has been a ‘jobless recovery,’” Osterberg said. “Once again, here we are in March, anticipating the graduation of new classes from college and high school, and wondering whether the Iowa economy will offer these new graduates attractive job opportunities. That is the policy issue that needs to be addressed in the light of these numbers.”

The largest single drop in January came in trade and transportation, down 1,900 for the month after three straight months of growth. Construction jobs fell 1,300  in January after gains in November and December, while government jobs, which have not shown an increase since August, fell by 300.

Increases came in professional and business services, 500; financial activities, 400; and manufacturing, 300.

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IPP reports about job and income trends are on the web at www.iowapolicyproject.org. The Iowa Policy Project is a nonprofit, nonpartisan research organization based in Mount Vernon.