Iowa lost jobs in April, continues to trail the nation in economic recovery

Iowa's economy continued to sputter in April, as the state lost jobs for the second time in three months.

Nonfarm employment dropped by 5,800 workers from March to April, inching Iowa's unemployment rate up to 3.8% from 3.7% in March, according to data released Friday by the U.S. Bureau of Labor Statistics. The state still has the 10th-lowest unemployment rate in the country. However, the latest figures show Iowa's job growth has lagged the nation's for six months.

From March to April, Iowa lost 3,100 jobs in the construction sector, 2,200 jobs in retail trade and 1,000 jobs in administrative and support services.

Some industries saw growth as more customers became vaccinated. Accommodations and food services added 600 jobs, and arts and entertainment and durable goods manufacturing added 500 apiece.

Since the COVID-19 pandemic began, Iowa has lost about 73,500 jobs. Accommodations and food services, health services and local government continue to be the sectors suffering the most. 

Overall, the state did not absorb as deep of an economic shock from the pandemic as most others because it does not rely as much on tourism-related industries. But its economic recovery has fallen behind the rest of the country's.

Since October, the number of Iowans with jobs has increased by 4,700, according to the U.S Bureau of Labor Statistics. That represents growth of about 0.3%. As a whole, the nation has added jobs at four times that rate over those six months.

It's true that other states had more ground to pick up after the pandemic recession, and therefore had more potential to add large numbers of jobs than Iowa did. Still, Iowa lags in replacing jobs lost during the recession: As of April, the United States overall has recovered about 63% of the jobs lost, while Iowa has recovered 59%.

Iowa's greatest problem since the pandemic has been the number of workers dropping out of the labor force entirely, meaning they don't have jobs and aren't looking for work. About 87,000 workers have dropped out since February 2020, a 5% decrease in the size of Iowa's workforce. That's more than double the country's overall.

More:Iowa Gov. Kim Reynolds announces cut to federal unemployment benefits, citing need to boost economy

The latest economic figures come a week after Gov. Kim Reynolds announced that she is cutting unemployment benefits for thousands of Iowans by ending Iowa's distribution of benefits under Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation. Congress enacted those federally funded programs in March 2020 to cover workers who don't qualify for payments under standard state unemployment insurance. 

As of May 1, the most recent date available, about 33,000 Iowans were receiving payments under the two programs, which will expire June 12 in Iowa rather than in September, the date set by Congress. 

More:What you need to know about Iowa's cuts to unemployment benefits

Reynolds' cuts also extend to Federal Pandemic Unemployment Compensation, a program that provides an extra $300 a week to all workers receiving unemployment insurance.

Reynolds explained her decision as an attempt to boost the state's economy, saying last week that "these payments are discouraging people from returning to work."

Iowaworks.gov showed 66,000 open positions last week. Also, as of May 14, the number of Iowa job postings on Indeed.com was up 33% over Feb. 1, 2020, a month before the pandemic began, said Carrie Engel, a spokesperson for the website.

Iowa Workforce Development Director Beth Townsend said in a statement last week that "the overwhelming message we receive from employers these days is the lack of workforce that is adversely affecting their ability to recover from the pandemic.”

Some unemployment claimants have told the Des Moines Register that the job field is not as open as the listings data suggests. They simply don't qualify for some positions, such as registered nurse, the most frequently posted opening in the state at about 3,400, according to Iowaworks.gov.

In other cases, workers have said the only listings they find near their homes are in positions like retail sales, which don't pay enough to make up for child care expenses. 

'We're really panicking right now':  Shortage of child care, looming unemployment cuts worry Iowa providers and parents

Andrew Stettner, a senior policy fellow at The Century Foundation, told the Register last week that he doubts cutting unemployment insurance benefits will bring back workers. He pointed out that the state's economic recovery actually slowed last fall, when the federal government initially ended its additional payments for workers on unemployment. (The benefits ended in September and resumed at a lower level in January.)

Nationally, some economists were disappointed by the April employment data. The country added 266,000 jobs during the month, according to the Bureau of Labor Statistics, the smallest growth in a month this calendar year.

The national unemployment rate increased slightly to 6.1% in April from 6% in March.

The states with the lowest unemployment rates in Friday's report were Nebraska, New Hampshire, South Dakota and Utah, all tied at 2.8%. The highest was Hawaii, at 8.5%.

Tyler Jett covers jobs and the economy for the Des Moines Register. Reach him at tjett@registermedia.com, 515-284-8215, or on Twitter at @LetsJett.