Iowa’s January seasonally adjusted unemployment rate was 3%, the same as December’s revised rate, Iowa Workforce Development reported today.

Iowa businesses shed 2,000 jobs in January, mostly due to retailers adjusting staffing after the holidays. Iowa’s total nonfarm employment in January was 1,596,800, down from 1,598,800 in December, the report showed.

“Iowa’s sluggish hiring trends from the second half of 2023 carried into January with modest job losses across the state,” wrote Nationwide senior economist Ben Ayers about Iowa’s employment data. “The slow hiring was widespread across sectors in the state. There remain too few workers looking for jobs with a contracting labor force and little sign of improvement in the pipeline.”

The state’s labor force participation rate slipped to 67.3% in January, down slightly from December’s rate of 67.5%, the report showed. In January 2023, the labor force participation rate was 68%.

Since January 2023, Iowa’s labor force has shrunk by 7,200 people, from 1,711,900 to 1,704,700 in January 2024, the report shows. The last time the state’s labor force was at 1,704,700 was in April 2022, state workforce data shows.

“A dwindling labor force within Iowa has been a key contributing factor to the sluggish job growth,” Ayers wrote. The shrinking labor force participation rate has limited hiring and growth across the state, he wrote. “Job openings have also receded, but there remains much more demand for workers than supply in the labor pool.”

Iowa has over 59,300 job openings, according to Iowa Workforce Development’s website.
“It is important we retain Iowans in the workforce and recruit those who have dropped out,” Beth Townsend, the agency’s executive director, said in a news release. “We encourage those who have been out of the workforce for a period of time to get in touch. We can help [them] find [their] next great career.”

The U.S. unemployment rate in January was 3.7%.