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Iowa Workforce Development Report Suggests Economy Will Begin to Grow in 2022

Iowa will recover most of the nonfarm jobs lost as a result of the COVID-19 pandemic by the fourth quarter of 2021, and the economy will start to grow in 2022, a new report suggests.

Mary StrokabyMary Stroka
August 28, 2021
in State Government
Reading Time: 3 mins read
Iowa’s Unemployment Rate Drops to 3.6 Percent in October

Photo by Artem Beliaikin from Pexels

(The Center Square) – Industry projections suggest Iowa will recover most of the nonfarm jobs lost as a result of the COVID-19 pandemic by the fourth quarter of 2021, and the economy will start to grow in 2022, according to a new report.

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“While the Iowa Economy isn’t back to a pre-pandemic level yet, our economy has shown definite signs of recovery and most economic data produced by our Labor Market Information (LMI) Division show for now our economy is trending in the right direction,” Deputy Director of Iowa Workforce Development and Labor Market Information Director Ryan West said in the report, 2021 Iowa’s Workforce and the Economy, which was released Thursday by the department.

The leisure and hospitality sector was “unquestionably the most affected among all groups as social-distancing measures were implemented,” the report said. The sector lost 66,900 jobs – 46.1 percent of its payroll jobs – by April 2020.

“This was unsurprising as bars and restaurants were among the first businesses to have restrictions implemented,” the report said. “Additionally, entertainment and recreational industries trended down as many parts of the country asked residents to avoid non-essential trips.”

The food services and drinking places subsector, which includes the restaurant industry, held 87,135 jobs in 2020, a 14.9 percent decrease from 102,375 in 2019.

Iowa Restaurant Association President and CEO Jessica Dunker told The Center Square in a phone interview that “half” of the restaurants in Iowa are not yet serving at capacity due to workforce shortages. She said that she does not foresee another shutdown for indoor dining in Iowa, but if that were to happen, the industry would see more closures because restaurants wouldn’t be able to afford to stay open – or have “the will” to stay open, as the last 18 months have dealt the industry “a crushing blow.”

“We’ve taken all we can bear at this point,” she said. “We have so appreciated the state programs and the federal programs that have rolled out to help us, but those programs have not made us whole. They’ve just helped us get to the other side.”

Labor participation continues to increase, while the state’s unemployment rate rose 4.0 percent to 4.1 percent from June to July, compared with 6.1 percent in July 2020, Iowa Workforce Development said in its July report, released August 20. Last month, there were 800 more unemployed Iowans looking for work and 5,700 “newly employed” Iowans since June (55,400 higher than July 2020), bringing the Iowa labor force to 1.59 million and the participation rate up 0.3 percentage points, to 66.9%, the agency said.

“From May to July we saw an increase of 175 percent in the number of people visiting our IowaWORKS job centers to take active steps towards finding work, and that trend has continued in August,” Iowa Workforce Development Director Beth Townsend said in the July report. “As we’ve seen over the past few months, Iowans are re-entering the labor force in increasing numbers, and this shows that we continue to move in the right direction.”

Accommodations and food services was the top jobs-adding sector for July, with 4,400 jobs. The sector has added 13,400 jobs in 2021. The health care and social assistance sector experienced its first gain in jobs since December 2020.

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The sector that experienced the largest job losses (800) was professional and business services, “fueled primarily by losses in temporary help services along with services to buildings and dwellings,” the agency said.

Leisure and hospitality added the highest number of jobs, 16,300, among all sectors since July 2020, followed by manufacturing (10,000). Transportation and warehousing, health care and social assistance, and information have experienced losses overall since last July, losing 800, 800, and 300 jobs, respectively.

From March 8, 2020, to August 21, regular unemployment insurance payments have totaled $1.28 trillion, and federal pandemic unemployment compensation has totaled $2.1 billion, the agency reported.

Iowa Workforce Development Public Information Officer Jesse Dougherty told The Center Square in an emailed statement that as of Aug. 23, there are 78,288 job openings in Iowa listed on the agency’s IowaWorks.gov website.

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Tags: Beth TownsendCOVID-19Iowa Restaurant AssociationIowa workforceIowa Workforce DevelopmentJesse DoughertyJessica DunkerRyan West
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Mary Stroka

Mary Stroka

Mary Stoka is a freelance writer, editor, journalist, and public relations professional who lives in Chicago, Ill.

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