(The Center Square) — Iowa’s June unemployment rate remained at 2.8%, but falling labor force participation could be a sign of a weakening labor market, according to a report from the Iowa Common Sense Institute.
The rate is the seventh lowest in the U.S., with an unemployment rate of 41% for June.
While the number of people unemployed decreased to 46,600 in June from 46,900 in May, the number of working Iowans fell by 3,200 to 1,641,400, according to Iowa Workforce Development. The agency attributed the decline in the workforce to retirements.
“Despite ongoing economic challenges, Iowa’s workforce held steady during June as private industries advanced by 1,500 jobs,” said Beth Townsend, executive director of Iowa Workforce Development. “Iowa’s economy has shown great resilience and employers continue to hire. IowaWORKS.gov includes over 58,000 open jobs and our team is ready to help Iowans find their next new opportunity.”
CSI, a free enterprise think tank, looked at two sets of data — the Bureau of Labor Statistics establishments survey and the BLS survey of households.
“In short, falling labor force participation and stagnating jobs growth indicate Iowa’s labor market may be weakening,” Ben Murrey, director of policy and research for CSI, said in an email to The Center Square. “According to the establishment survey, employment peaked in March with 1,611,700 jobs. While the state gained 300 jobs in June, it’s still 1,700 jobs down from the peak (1,6010,000 after the new print). The LFPR fell from 66.8% to 66.5% in June.”
The numbers indicate that Iowa has not returned to its pre-pandemic employment-to-population ratio, according to the CSI report.
“In June, Iowa’s LFPR fell to 66.5%, which is 3.1% below January 2020’s LFPR of 69.6%,” the report said. “Nonetheless, the unemployment rate has remained stagnant at 2.8%, down from a recent peak of 3.1% that held from August through November 2023. The unemployment rate remaining unchanged with a falling labor force participation rate suggests some unemployed individuals have quit looking for work and dropped out of the workforce, causing the percentage of the workforce that remains unemployed to fall.”
The most significant job gains were in the health care and social assistance sector, which added 1,800 jobs from May to June, according to IWD. The professional and business services sector added 1,000 jobs.
The biggest losses were in the manufacturing sector, which dropped 1,000 jobs, and leisure and hospitality, which lost 800, according to IWD.
