DES MOINES, IOWA – Iowa’s Labor Force Participation Rate rose to 67.0 percent in January, up from the 66.4 percent first announced for December, after growth and an annual revision of labor statistics added 31,000 people to the official estimate of Iowa’s workforce.

Even after the revision, January’s Labor Force Participation increased slightly from the revised December rate of 66.9 percent. Meanwhile, Iowa’s unemployment rate in January held steady with the revised December rate of 3.3 percent, while the U.S. unemployment rate decreased to 4.0 percent.

The total number of unemployed Iowans increased to 56,500, up 200 from revised December data. Meanwhile, the number of working Iowans rose by 2,700 to 1,664,100. The largest increases in the labor force came among women aged 45-54 and women 20-24.

“January’s report showed a large number of people entering Iowa’s labor force and immediately finding work,” said Beth Townsend, Executive Director of Iowa Workforce Development. “Despite recent layoffs in some industries, Iowa grew jobs in January, for the third month in a row, and absorbed more than 2,000 people who came back to the workforce in search of a new career. Growing labor force participation is a welcome improvement to see early in 2025; with more than 50,000 open jobs, we know employers need even more Iowans to return to the workforce.”

The last five years of monthly labor force data (2020-2024) recently were revised as required by the U.S. Department of Labor, Bureau of Labor Statistics. This “benchmarking” is the periodic process of re-estimating statistics as more complete data becomes available, such as updated data from the U.S. Census Bureau. Prior-year estimates for the Current Employment Statistics (CES) and Local Area Unemployment Statistics (LAUS) programs – key statistical measures of employment – are benchmarked annually. Revised data are incorporated in January employment statistics when they are released each March.

Seasonally Adjusted Nonfarm Employment

Iowa establishments added 1,400 jobs in January, raising total nonfarm employment to 1,594,200. This increase is the third consecutive for the state, with gains stemming from private education (+100) and health care (+600) industries. Government (a sector that includes federal, state, and local political subdivisions, as well as schools, universities, and public hospitals) grew largely because state universities retained more jobs than seasonally expected. Meanwhile, private industries shed 1,500 jobs between December and January and are now down 2,500 jobs annually.

Health care and social assistance added 600 jobs to lead all other sectors. This sector has gained jobs in four consecutive months and continues to trend up, at all-time highs for employment within this sector. Other gains were small and included leisure and hospitality and other services. Conversely, construction shed the most jobs in January (-800). This decline erases a gain of similar magnitude in December. Professional and business services are also down relative to December (-600). Half of those jobs shed were related to the management of companies and enterprises. Manufacturing lost 300 jobs in January. Most of these losses were within durable goods factories.

Total nonfarm employment is up 4,200 jobs over the last 12 months. Private service industries have gained 7,400 jobs thanks to hiring in education and health care (+4,700) and trade and transportation (+3,100). Annual losses were led by manufacturing (-7,100). Most of these losses were within durable goods production (-4,800). Construction is down 2,700 jobs since last year, and professional and business services has shed 2,300 jobs.

By O. Kay Henderson (Radio Iowa)

The Iowa House has unanimously voted to set new training standards for people who recycle the batteries from electric vehicles or hybrid vehicles that can run on battery power or gasoline.

Under the bill, the Iowa DOT would approve a training program and issue certificates to those who complete it. “There are some risks in handling these large batteries,” Representative Chad Behn of Boone said. “Beginning in 2027, those who are recycling the batteries out of these vehicles would be required to complete an education program on how to handle and store these high voltage batteries.”

Over 14,500 electric vehicles were licensed in Iowa by the end of last year. Experts say EV batteries typically last between eight to 12 years before they must be replaced. When high voltage batteries are removed from vehicles, any remaining charge in the battery is drained, then it’s shredded into a black powder. That powder contains valuable minerals that can be used to make more batteries.

Twenty states already have laws on EV battery recycling.

By O. Kay Henderson (Radio Iowa)

Governor Reynolds and other Republicans say the latest state revenue projections show tax cuts are working as intended. Democrats say the data shows a looming crisis as the governor’s budget plan calls for spending more than the state will collect in taxes and requires using 900 million dollars in state reserves.

Kraig Paulsen, the governor’s top budget advisor, said there are “no surprises” in the numbers. “Between the tax cuts enacted and the economic headwinds that have existed for well over a year now, revenues have tightened,” Paulsen said Thursday. “However, the spending discipline by a our elected leaders — that is the governor and the General Assembly — continue to put the state in a position where the needs of Iowans can be met and we can weather through this tighter time.”

Paulsen and other members of the state Revenue Estimating Conference predict tax collections will fall well over 6% during the current year and drop nearly 7% the following year. “The tax cuts are having the intended effect,” Paulsen said. “They’re leaving more money in the pockets of Iowans and Iowa employers.”

Democrats say using one-time withdrawals for on-going state operations is bad budgeting. They point to long-term forecasts from the governor’s budget office showing “billions of dollars will be pulled from the state’s reserves” over the next five years to balance state budgets.

Paulsen said the state is not draining reserve accounts, Iowa’s economy is strong and the tax base is expected to grow in a couple of years.

“While inflation is slowing from its peak, it remains elevated. Mortgage rates have seen a slight decline in recent weeks, but interest rates are still at a level that is prohibitive for investors,” Paulsen said. “Obviously it will be helpful when these drop and there is certainty coming out of Washington, D.C.”

The other members of the State Revenue Estimating Conference cited concerns about tariffs that will raise the price of goods and services for Iowans and impact Iowa farmers and manufacturers.