DES MOINES, IOWA – Iowa’s seasonally adjusted unemployment rate increased to 10.2 percent in April. The state’s jobless rate was 2.7 percent one year ago. The U.S. unemployment rate rose to 14.7 percent in April.
“April is the first month we have seen the real impact of the pandemic on our unemployment rate. We remain hopeful that as we reopen the state and more people return to work, the rate will decrease quickly and this unprecedented rate will be a very temporary one,” Beth Townsend, director of Iowa Workforce Development, said. “The silver lining in this month’s report is that over 1.5 million Iowans remained in the workforce despite the pandemic and this will do the most to decrease the recovery time.”
“For Iowans returning to the workforce, we want to ensure employers and employees have the resources and information to help with this transition. If you have questions about returning to the workplace or the safety guidelines implemented by the U.S. Department of Labor, please review our FAQs and guidance on https://www.iowaworkforcedevelopment.gov/COVID-19,” she added.
The number of unemployed Iowans jumped to 175,300 in April from 56,600 in March. The current estimate is 128,300 higher than the year ago level of 47,000. The total number of working Iowans decreased to 1,536,200 in April. This figure was 129,200 less than March and 144,200 lower than one year ago.
Iowa total nonfarm employment fell by 177,100 jobs in April as social distancing efforts to curtail spread of the coronavirus took effect. This decline dwarfs anything Iowa has seen historically and follows a loss of 8,900 in March which would have also been considered extremely large prior to April. Overall, the state’s payrolls were trimmed by 11.3 percent versus last month, slightly lower than the U.S. drop of 13.5 percent in total nonfarm employment. Virtually every sector began working in a reduced capacity, although goods-producing sectors displayed a lower reduction of staff (-6.0 percent). Private service industries declined by 13.3 percent and were driven down by sizable layoffs and furloughs within hotels, restaurants, and entertainment industries. Government was also not spared, declining 9.4 percent or 24,500 jobs. Much of this reduction can be attributed to state universities and public schools dropping to summer levels. Most institutions ended in-person classes after spring break.
Accommodations and food services led all sectors with 56,400 jobs shed in April. The layoff was nearly half(-46.5 percent) of all staff on payroll in this sector as restrictions went into place and halted in-person dining. In total, leisure and hospitality shed 68,500 jobs (-48.9 percent), easily the most of any sector. Retail trade lost 22,300 (-12.8 percent) as non-essential stores either temporarily closed or worked in a reduced capacity. Education and health care dropped by 17,700 jobs (-7.6 percent) with health care and social assistance laying off 11,400. Professional and business services lost 13,900 (10.2 percent) and manufacturing reduced staffing levels by 10,600 jobs (-4.8 percent).
Following this month’s drop, the state now trails last year’s mark by 191,200 jobs (-12.1 percent). However, this annual loss should mitigate substantially as the year progresses and firms try to resume normal operations. Accommodations and food services and retail trade shed about half of all payroll employment and have the largest over-the-year deficits to make up (-56,400 and -22,500, respectively), yet these industries may also have to deal with new regulations that reduce foot traffic or attendance.