Issued Tuesday, January 28, 2014
IOWA CITY, Iowa (January 28, 2014) — Iowa nonfarm jobs dropped in December — the third decline in five months — while the unemployment rate fell to a post-recession low of 4.2 percent, according to information released today by Iowa Workforce Development.
The nonpartisan Iowa Policy Project (IPP), which tracks Iowa job trends, released this statement from Research Associate Heather Gibney:
“The preliminary December numbers are a setback to Iowa’s job recovery. Depending on potential revisions that we’ll see in mid-March, the first and second halves of 2013 provide distinctly different results for Iowa jobs. The first half of the year produced jobs at a pace of about 2,300 per month, up from the pace of the last two years (1,700 per month). But in the second half of the year, we have seen three months of decline and three months of increases for a net reduction of about 1,100 jobs in that period.
“So, after two slow-growth years, the state has fallen back to about the pace of 2010, when we were just coming out of the Great Recession. It is important to recognize that during the year we did erase the jobs gap from the start of the recession, and reached a new record high of nonfarm jobs in July. In addition, the unemployment rate at 4.2 percent is at its lowest in the recovery.
“Still, we would point out Iowa’s jobs deficit when population growth is taken into account. Under that calculation, by the Economic Policy Institute, Iowa needs to add 63,200 jobs to the net gain of 3,600 since the start of the recession to keep up with population growth. If Iowa were to get back on the job growth pace set in the first half of 2013, the state could erase that deficit in less than three years.”
Source: Iowa Workforce Development, Bureau of Labor Statistics.
Source: Economic Policy Institute.
— Nonfarm jobs decreased by 2,400 in December to 1,528,500.
— Nonfarm jobs remained 12,800 ahead of last December.
— The unemployment rate fell to 4.2 percent in December, its lowest point in five years, from 4.3 percent in November and 5.0 percent a year earlier.
— The labor force — those working or looking for work — rose by 7,100 from November and was up 41,900 over 12 months.
— Initial unemployment claims were 30,682 in December, up 98 percent from a month before and 13.6 percent from December 2012. The number of continuing claims — 33,731 — was up 52.6 percent for the month and down 10 percent from December 2012.
— Iowa’s average monthly job increase during 2013 was about 1,100, which compares poorly not only to "boom" years but to moderate-growth years, including the last two, when job gains averaged 1,700 per month.
— Trade, transportation and utilities posted the largest gain in December with 2,200 added jobs, while manufacturing rose 1,000 and government services gained 500. Seven sectors declined — leisure and hospitality (2,600), construction (1,900), financial activities (800), education and health (300), both information and professional and business services (200) and “other” (100). Mining was unchanged.
— Since the beginning of the year, trade, transportation and utilities had the biggest gain at 5,000, followed closely by professional and business services (4,900). Education and health services (3,200) and manufacturing (2,900) also led gains for the year.
— Governor Branstad set a goal of 200,000 new jobs over five years. Iowa's economy has produced 52,600 net new jobs through the first 35 months of his term. To add the remaining 147,400 jobs, Iowa would need to 5,900 new jobs per month over the next 25 months, compared to the 1,500 pace of the first 35 months. Iowa has not sustained growth of even 2,000 jobs per month over a calendar year since the 1990s.
— Another way to look at the health of the Iowa economy would use estimates by the Economic Policy Institute, which projects jobs needed to make up for jobs lost, plus keep up with population growth. (See bottom graph at left.) Iowa’s population has increased by 4.4 percent since the start of the 2007 recession; so, combined with a net gain of 3,600 jobs since then, Iowa remains 63,200 jobs behind what would be needed both to regain all lost ground during the recession and also keep up with population growth.