Iowa’s seasonally adjusted unemployment rate held steady at 3.5% in December, matching November’s rate and up slightly from 3.3% one year ago, according to data released by Iowa Workforce Development.
The state’s labor force participation rate increased to 67.7% in December, up from 67.6% in November and 66.9% in December 2024. Iowa gained 4,600 workers compared to the previous month.
The total number of unemployed Iowans decreased to 61,400 in December from 61,800 in November. The total number of working Iowans rose to 1,688,700 in December, 5,000 higher than November and 27,300 higher than one year ago.
“December’s report shows that Iowa ended 2025 with 32,400 more workers than we had at the end of 2024,” said Beth Townsend, executive director of Iowa Workforce Development. “And the numbers show that 27,300 additional Iowans were able to successfully find jobs in 2025, which is consistent with the increases we’ve seen over the past two months in the labor force participation rate. With almost 50,000 open jobs on IowaWORKS.gov, there are still employers looking for their next great hire, and we can help you connect.”
The U.S. unemployment rate decreased to 4.4% in December.
Nonfarm employment
Iowa businesses cut 3,300 jobs in December, lowering total nonfarm employment to 1,595,500. Private industry was responsible for the decline, with losses in both goods-producing industries and private services totaling 4,400 jobs. Hiring at the local government level drove a 1,100 increase in government sector jobs.
Retail trade led all sectors in losses in December, shedding 1,500 jobs. The sector had shown signs of hiring in the third quarter but lost 1,900 jobs since September. Wholesale trade continued to trend down in December, losing 1,000 jobs. Accommodations and food services shed 1,800 jobs for the second consecutive month, with full-service restaurants accounting for most of the monthly decline. Manufacturing cut a combined 1,300 jobs.
Job gains were smaller and led by finance and insurance, which added 300 jobs. Education and health services and other services each gained 200 jobs.
Over the past 12 months, the state added 2,700 jobs. Construction led job growth with 7,100 positions added. Education and health care gained 5,900 jobs, with health care and social assistance alone adding 3,900 jobs.
Leisure and hospitality cut 3,800 jobs since last December, with losses concentrated in accommodations and food service industries. Professional and business services lost 3,400 jobs, and trade, transportation and utilities shed 2,300 positions. Government sector jobs increased 1,600 for the year, while federal government positions declined 1,000 due to budget cutbacks.
