Iowa unemployment rate for February drops to 2.9% as job growth continues

With factories and local governments hiring, Iowa's economy continued to grow in February, a federal survey released Thursday shows.

According to Iowa Workforce Development, the state added 300 jobs for the month, dropping the unemployment rate to 2.9% from 3% in January. About 1,100 fewer Iowans were unemployed in February, the survey indicated.

That matched the rate in August, before a five-month surge to 3% or above. In April 2022, the state's unemployment rate had fallen to 2.3%, the lowest since at least 1976.

Meanwhile, the number of Iowans in the labor force grew in February by about 100. The labor force consists of working-age residents who report that they either have jobs or are looking for employment.

Iowa Workforce Development Director Beth Townsend celebrated the positive figures in a statement, pointing out that companies are hiring even as inflation remains high. The Fed again raised borrowing rates for banks and companies on Wednesday as it continues to try to put the brakes on the economy and slow the rise in prices.

"This demonstrates the resilience of the Iowa economy despite major national headwinds," Townsend said.

Employers in the durable goods manufacturing sector reported hiring about 1,000 workers around the state in February, as did Iowa's local governments. The office administrative and support services sector reported adding 600 workers. The professional, scientific and technical services sector added 400 workers.

On the downside, construction companies lost about 1,000 employees in February, according to the survey. The drop reversed unusual progress in January, when the sector added 2,700 workers, a hiring spree that rarely happens during the state's below-freezing winters. Iowa Workforce Development attributed that growth to unseasonably warm weather, though February also recorded above-average temperatures.

The health services sector shed 900 workers in February, while non-durable goods manufacturers shed 300 workers.

Non-durable goods manufacturers make products that are quickly consumed, such as pork and oil. Durable goods manufacturers make products that consumers usually keep for years, like tractors and refrigerators.

How has Iowa's economy changed since last year?

The state added 22,800 jobs from February 2022 through last month, for a growth rate of 1.5%. The country overall grew at a rate of about 2.9% during that period, meaning Iowa's employers added workers at a slower pace than companies in many parts of the country did.

Over the past year, some of the sectors that had struggled the most since the start of the COVID-19 pandemic have added the most employees. The health services sector added 4,800 workers, while the accommodation and food services sector added 4,000.

Local governments added 3,500 workers. Education services employers added 3,300 workers.

On the downside, transportation companies in Iowa shed 2,200 employees. Retailers shed 2,000 workers. Office administrative and support services employers shed 1,700.

How has Iowa's economy changed since the start of the pandemic?

Iowa employers have added 1,300 jobs since February 2020, the month before companies laid off employees en masse amid government-enforced business shutdowns, briefly bumping Iowa's unemployment above 10%.

Over the last three years, the number of employees at Iowa companies has increased by 0.8%. Nationally, the growth rate is 2%. That means companies around the country have hired at a rate about 2-1/2 times faster than those in Iowa have.

In Iowa, the health services sector has been the greatest drag on the economy, with about 5,400 fewer employees in February compared to three years ago. The accommodation and food services sector has shed 2,900 workers during that period, while the state government has shed 2,300.

On the positive side, Iowa construction companies have added 5,300 workers since the start of the pandemic. The professional, scientific and technical services sector have added 3,800 workers. Non-durable goods manufacturers have hired 3,400 employees.

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.

This article originally appeared on Des Moines Register: Continued job growth drops Iowa unemployment to 2.9% in February