New unemployment claims continued to climb in the week ending April 11. Nationally, 5,245,000 workers filed new claims, bring the total to 22,634,000 new claims since March 21 (when the first COVID-19 layoffs starting hitting the books). As this week’s release concludes glumly: “This marks the highest level of seasonally adjusted insured unemployment in the history of the seasonally adjusted series.” In Iowa, we added 46,356 new claims, for a four-week total of 207,468.
We can now also begin to see the impact on national and state unemployment rates. The weekly claims data allows us to calculate the “insured unemployment rate” or the share of the labor force receiving unemployment benefits. In Iowa, the insured unemployment rate rose to 10.2 percent for the week ending April 4.
It is important to point out that this represents a fraction of the actual unemployment rate, which is the share of the labor force unemployed but looking for work (in Iowa, only about 40 percent of unemployed workers receive unemployment benefits).
The rates of insured unemployed in the states for the week ending April 4 range from 3.8 percent in South Dakota to 17.8 percent in Rhode Island. For a conservative estimate of the actual unemployment rates by state, double these numbers. Those estimates — putting most states in the range from 20 to 30 percent — are steeper than the unemployment rates of the Great Depression.
Colin Gordon is a professor of history at the University of Iowa and senior research consultant at the nonpartisan Iowa Policy Project.
IOWA CITY, Iowa — Iowa nonfarm jobs increased in August to 1,553,500, but the unemployment rate remained at 4.5 percent, down from 4.7 percent a year ago. The Iowa Policy Project today released the following statement by research associate Heather Gibney about the latest numbers:
“The month of August saw a very small increase in total nonfarm jobs, which is right in line with the fact that Iowa’s major job sectors lost about the same amount of jobs that were gained. Professional and business services and leisure and hospitality saw the largest gains while construction experienced the biggest loss.”
“It’s also important to look at long-term trends rather than one-month changes. Iowa is now above pre-recession job levels — but those jobs serve a 4.9 percent larger population, according to the Economic Policy Institute (EPI). The net job gain since the December 2007 start of the recession is only 28,600 — but 75,400 jobs were needed by now to keep up with population growth. Therefore, the state shows a job deficit of 46,800 jobs.”
Job Growth Perspective
Governor Branstad set a goal of 200,000 new jobs over five years. Iowa’s economy has produced 77,300 net new jobs through the first 43 months of his term. To add the remaining 122,700 jobs, Iowa would need to add 7,200 new jobs per month over the next 18 months, compared to a pace of 1,800 for the first 43 months.
Nonfarm jobs held steady in August at 1,553,500. Nonfarm jobs are 18,000 ahead of where they stood a year earlier.
Nonfarm jobs are 25,500 ahead of the May 2008 peak of 1,528,000, and 28,600 ahead of the level at the start of the last recession in December 2007.
The unemployment rate remained at 4.5 percent in August but was down from 4.7 percent a year earlier.
The labor force — those working or looking for work — rose by 2,400 from July to 1,703,000 and was up 29,800 over 12 months.
Initial unemployment claims were 11,445 in August, down 11.2 percent from July and 4.6 percent from a year earlier. The number of continuing claims — 23,053 — was down 6.6 percent for the month and down 7.5 percent for the year.
Five sectors posted gains in August led by professional and businesses services and leisure and hospitality (1,200), trade and transportation (500), financial activities (300) and mining (100).
These increases were offset by losses of 1,100 in construction, a loss of 600 in education and health and government jobs, a loss of 500 in manufacturing, 200 in other services, and 100 for information jobs.
All job sectors except information and manufacturing have shown net gains over the last 12 months. Construction jobs are up 3.2 percent over the year, with changes in other major categories up by less than 2.4 percent over 12 months.
300 jobs were added during the month of August.
Iowa averaged a monthly increase of about 1,500 jobs over the last 12 months.
For a full year, Iowa has remained above the previous job peak of 1,528,000, reached in May 2008, just before jobs began to plummet during the last recession.
Given that the population of Iowa has grown, it makes sense that more jobs need to be added to keep up. Our job deficit is almost 48,000.
Iowa’s up-again, down-again job picture is looking up again, at least for now. The May numbers from the state show an increase of 6,200 jobs. Coming on the heels of a 3,700 increase in April, this marks the first two-month gain since the end of last year, and the increase is the largest since last October.
One-month results, however, do not tell the whole story of what’s happening in the state economy and the job market. Over the past year, Iowa has averaged a gain of about 2,100 jobs per month, which is a modest pace. At this rate it would take about three years for Iowa to completely recover from recession losses.
In fact, even though Iowa has more jobs than it did when the recession started, the state shows a jobs deficit:
Source: Economic Policy Institute
Given that the population of Iowa has grown since the start of the recession, it makes sense that more jobs need to be added to the economy each year in order to keep up with the growing number of people. According to the Economic Policy Institute, 23,800 jobs have been added so far but 71,600 were needed by now to keep up with this growth. This means that there aren’t enough jobs for everyone who wants or needs one — a deficit of 47,800, as shown in the graph above.
For more about the latest Iowa job numbers, see our new Iowa JobWatch report. IPP has given its view of the monthly numbers since 2003 — there are always plenty of new angles for a “Job Watcher.”
Why not get rid of the political goal and focus on a realistic economic goal: the job growth we would need to bring down unemployment and keep pace with the growth of the labor market. As of the latest count, we are 55,100 short.
This week we were treated (?) to the latest bizarre count provided by Governor Branstad’s administration on how many jobs he has created.
The Governor is claiming 160,600 jobs already created since he took office, and it’s nowhere close to reality, if for no reason other than the fact that he’s only wanted to count job gains and ignore the losses.* But even then, the number is inflated.
So, class, let’s all take out our abacus and our slide rule and try to come up with the same number. On second thought, let’s not. Let’s get past the politics on job numbers and just count ’em ourselves. A pencil will do.
As you’ll recall, the Governor promoted a goal of creating 200,000 jobs in five years. He took office in January 2011.
We start with 1,475,900 — the number of nonfarm jobs in Iowa in January 2011, according to Iowa Workforce Development. (Find IWD’s spreadsheet here.) The latest data, which are preliminary and might be adjusted, put that number at 1,530,300 as of June 2013. That’s a net increase of 54,400 jobs.
To reach 200,000 jobs by January 2016, the Governor’s goal, Iowa would have to add 4,700 jobs per month for the next 31 months.
IPP’s latest JobWatch report shows we have not kept that kind of pace in Iowa over the last decade. In 2013 the average net gain has been 2,400 a month, which is higher than usual.
Why not get rid of the political goal and focus on a realistic economic goal: the job growth we would need to bring down unemployment and keep pace with the growth of the labor market. As of June, we are still 55,100 jobs short of this basic threshold. But that’s a more manageable number than the 145,600 left to meet the Governor’s goal, and probably a more meaningful one.
Governors and state legislators have only so much impact on the overall health of a state economy to influence its job performance; there are much greater forces at work.
In the end, the issue for Iowa families is not as much a Governor’s goal as it is whether the economy is producing the number — and quality — of jobs necessary to maintain and improve all Iowans’ standard of living.
But we didn’t raise the issue about the job count. Others have. So as long as Iowans are going to be looking at it, we’ll help them to monitor it accurately.
* The Governor’s count of jobs already produced, 160,600, is far above even the number you’d accurately compute if you avoided counting job losses. Iowa Workforce Development has added a line on its nonfarm jobs spreadsheet leaving out the job losses and counting only gross jobs added, month by month, since January 2011. For what it’s worth, that number is 112,700 — about 48,000 behind what the Governor’s office was claiming Wednesday, and more than twice the actual net increase of 54,400.
Iowa’s cycle of recession and recovery: Like a lot of summer movies, it starts dramatically and then drags on and on.
OK, it’s not likely to offer much competition for World War Z or the Hangover 3, but this short video does provide a compelling look at Iowa’s slide into recession, and slow progress to recovery.
The unemployment rate, by county, is shaded from light to dark blue. And, as the months unfold from January 2007, the line graph at the bottom traces the trajectory of the recession — the blue line showing Iowa’s unemployment rate, the red showing that for the whole country.
Iowa escapes the early months of the national recession (which begins in December of 2007), but then sees the unemployment rate jump from 4.2 percent to 6.2 percent in late 2008. It would be 32 months (September 2011) before it was back below 6 percent to stay, and another 20 months (to this March) to settle back below 5 percent. Like a lot of summer movies, it starts dramatically and then drags on and on.
The final scene shows how little progress we’ve made, underscoring the magnitude of a jobs deficit composed of both the jobs we’ve lost, and those we’ve failed to create for new entrants to the labor force. It’s not a happy ending, but it has that gritty realism that the Oscar voters love.
Depending on which goal you choose, we’re anywhere from 4,100 to 155,100 from meeting it.
The graph below offers one way — actually, four ways — to look at the latest nonfarm job numbers in the context of history and job goals for Iowa.
As of February, we’re 4,100 behind where we were at the start of the recession in December 2007, and 7,200 behind Iowa’s peak nonfarm job level in May 2008.
However, Economic Policy Institute analysis suggests that those historical numbers don’t give an apples-to-apples picture for how well the economy is producing jobs to meet the demand for jobs — that you need to factor in growth in the population. When that is done, Iowa still has 60,900 to go to reach where we were before the recession.
Yet another number to consider is Governor Branstad’s goal of creating 200,000 jobs in five years. Since his term started in January 2011, Iowa has produced a net total of 44,900 jobs, which works out to a pace of 1,800 net new jobs per month. At that pace, the state is well off what is necessary to reach the Governor’s goal — 4,400 per month for the remaining 35 months of the five-year period.
As we point out in our monthly Iowa JobWatch report, the overall job numbers do not tell the full story about the job climate in our state. One thing those monthly numbers do not disclose is any detail about job quality — whether jobs gained or lost are full-time or part-time jobs, or are permanent or temporary positions, or pay well, or offer health and/or retirement benefits.
Jobs are at stake, right here in Iowa, with the vote in the House today.
When your state is not showing the heavy impact of joblessness in the United States, it can be easy to miss the impact.
Iowa’s jobless rate is 6 percent, two-thirds that of the nation as a whole, but nevertheless high for what we’re used to and representative of the fact that our payroll jobs are significantly below where they were before the recession started hitting Iowa. In our state, jobs are about 44,000 below where they stood in May 2008.
Today in the U.S. House, legislation is expected to come to a vote to cut unemployment benefits. It would cut up to 40 weeks of benefits next year — most from the states hardest hit by the recent recession. Our neighbors in Illinois, Missouri, Wisconsin and Kansas would see varying losses of weeks of benefits by next July. See the map below from the Center on Budget and Policy Priorities (CBPP).
As Chad Stone of CBPP notes in a recent blog post, cutting off benefits in the hardest-hit states “greatly raises the risk that unemployed workers will run out of UI benefits before they find another job, imposing even greater hardship on them and their families. It also reduces the amount of support that UI — one of our highest-bang-for-the-buck stimulus programs — can provide for the struggling recovery.”
But even Iowa would be affected, if not with the benefit cut the way other states would be hit, then in the indirect impact on the state’s economy.
The cuts would shut off a flow of funds into the U.S. economy, the impact of which we cannot avoid. Sooner or later, it will hit our own stores, factories and services.
In short: We don’t need our lack of beaches to show us that Iowa is not an island. Jobs are at stake, right here in Iowa, with the vote in the House today.