Issued Friday, August 17, 2018
IOWA CITY, Iowa (Aug. 17, 2018) — A slight drop in Iowa payroll jobs in July followed a stronger June than previously reported, while the unemployment rate fell to an 18-year low of 2.6 percent.
The Iowa Policy Project released the following statement from Executive Director Mike Owen about the latest seasonally adjusted jobs data from Iowa Workforce Development (IWD) and the U.S. Bureau of Labor Statistics (BLS).
“Certainly the low unemployment rate has a good sound to it, but neither that nor the count of actual payroll jobs masks the medium-term and long-term trend of very slow job growth in Iowa.
“Jobs were down in July by only 700, following an unusually large 7,200 increase in June. The latter number is more than double the previous 3,400 estimate for June, with increases in seven of the 11 major job sectors, and put Iowa at an all-time high of 1.592 million jobs.
“The two months together leave Iowa jobs 19,000 ahead of where they stood in July 2017. That 12-month increase is only a 1,600 average bump per month. The average gain through the first seven months of 2018 is only 1,300 per month. While positive, this job pace has kept Iowa below what is needed to fully recover from the Great Recession even after a decade.”
The Iowa Policy Project is a nonpartisan, nonprofit research organization in Iowa City that has been tracking Iowa job issues since its founding in 2001. Find reports at www.iowapolicyproject.org.
• Iowa nonfarm jobs fell by 700 to 1,591,500 in July, 19,000 ahead of July 2017.
• Iowa's unemployment rate fell to 2.6 percent, its lowest level in 18 years. That compares with 3.1 percent a year earlier.
• Only 4 of 11 major job categories showed gains in July — led by 1,300 in manufacturing, one of the state's four largest job sectors.
• Declines in four sectors included three in the other three large sectors — trade and transportation (2,100); government (700); and education and health services (600).
• Three sectors were unchanged.
• Over the year, manufacturing has gained the most, 11,300. Construction (3,500); financial activities (2,900); and professional and business services (2,600) showed the next largest increases among the eight sectors with net gains over the 12 months.
• Three categories declined over the previous 12 months — “other” services (2,600); trade, transportation and utilities (2,200); and information (100).
As we have noted before the unemployment rate and the payroll (nonfarm) job count come from different surveys.
A household survey measures the unemployment rate and estimates the size of the employment pool — how many are looking for work but not employed. Meanwhile, an employer survey measures how many jobs have been added but not necessarily how many jobs are available, or detail about the quality of the jobs.
Thus, conflicts in the direction of the two measures are not necessarily surprising.
Job Growth Perspective
• Iowa jobs still have not recovered from the Great Recession when accounting for population growth. According to the Economic Policy Institute, Iowa would have had to gain 102,400 net nonfarm jobs to keep up with 6.7 percent population growth since the December 2007 start of the last recession, but has gained back 66,300. This leaves a jobs deficit of 36,100.