Iowa’s seasonally adjusted unemployment rate fell to 3.2% in May, down from 3.3% in April and 3.6% a year earlier, according to Iowa Workforce Development. The U.S. unemployment rate held at 4.3% in May.
The number of unemployed Iowans declined to 56,100 in May, down from 57,200 in April. Total employed Iowans fell to 1,676,100, down 1,800 from April but up 1,600 from a year ago. Iowa’s labor force participation rate edged down to 67.4% from 67.5% in April.
“With five months of 2026 data now available, the emerging trend is one of slow-but-steady growth in Iowa hiring,” said Beth Townsend, executive director of Iowa Workforce Development. “Employers across most Iowa industries are adding jobs on a regular basis even as unemployment insurance claims hover at near-record lows and the state’s Unemployment Insurance Trust Fund has a balance of more than $2.1 billion. At the same time, more than 57,000 unfilled jobs are posted on IowaWORKS.gov, so opportunity remains for anyone who’s looking to find a better position or embrace a new career.”
Iowa employers added 3,400 jobs in May, pushing total nonfarm employment to 1,584,500. It was the third consecutive monthly gain; the state has added 8,200 jobs since February. Private service industries have been the primary driver of those gains, while goods-producing firms — chiefly construction and manufacturing — have shed 400 jobs over that span. Government employment has grown by 800 jobs at the local level but is down 1,600 compared to a year ago, while private industries trail year-ago levels by 10,000 jobs.
Retail trade led all sectors in May with 1,700 jobs added, its first sizable gain of the year. Hiring was spread across outdoor power equipment dealers, supermarkets, hardware stores, and car dealers, among others. Professional, scientific, and technical firms gained 900 jobs in May, their first increase since June 2025. Durable goods manufacturing added 600 jobs, fueled in part by foundry and metal products hiring, though that gain was partially offset by a loss of 400 jobs in nondurable goods manufacturing, where food production firms were responsible for the bulk of the decline. Nondurable goods manufacturers have cut 1,500 jobs since January.
On the negative side, other services shed 500 jobs in May, though the sector has shown no marked trend over the past 12 months. Health care and social assistance lost 500 jobs since April, a decline that IWD characterized as unusual given steady demand within the sector. Construction lost 400 jobs, as did administrative support and waste management.
On an annual basis, Iowa has shed 11,600 jobs since May 2025. Trade and transportation industries account for 6,100 of those losses, with trade responsible for 4,000 and transportation, warehousing, and utilities down 2,100. Manufacturing has lost 3,800 jobs over the past 12 months, with nondurable goods factories accounting for most of the decline at 2,200 jobs. Health care and social assistance has bucked the trend, adding 3,200 jobs over the past year despite the recent two-month dip. Construction remains up 1,700 jobs annually despite the May pullback, extending a trend dating back to October 2025.
