Iowa’s cumulative employment growth in 2025 is the lowest of any year since the pandemic, according to the latest Iowa Jobs and Labor Force Update from the Common Sense Institute.
From December 2024 through May 2025, the state has added just 500 total nonfarm jobs – a stark contrast to previous years in the post-COVID recovery. Of those, only 100 jobs were added in the private sector, highlighting a slowdown in employment momentum across Iowa.
The situation worsened in May, as the state lost 5,200 jobs – one of the sharpest monthly declines in recent memory. Eight of Iowa’s 11 major industry sectors posted job losses, led by education and health services (-1,300), financial activities (-1,200), and professional and business services (-1,200). The trade, transportation, and utilities sector also dropped by 1,000 jobs. Manufacturing, leisure and hospitality, construction, and information all posted losses as well.
Government was the only sector with a significant gain, adding 1,000 jobs, including 800 at the local level. The report also noted minor increases in mining and logging and other services, each gaining 100 jobs.
Revised figures for April indicate Iowa’s labor market performance last month was weaker than originally reported, with 700 fewer jobs than previously estimated. The trade, transportation, and utilities sector accounted for the largest downward revision, losing 1,300 jobs.
Despite these setbacks, Iowa’s labor force participation rate ticked up by 0.1 percentage point in May to 67.3%, the eighth highest in the nation. However, it remains 2.2 percentage points below the state’s pre-pandemic rate of 69.5% from January 2020.
Iowa’s unemployment rate also rose slightly in May, increasing from 3.5% to 3.6%, placing the state 19th lowest in the nation—a drop of two spots from April.
The report draws on data from the U.S. Bureau of Labor Statistics, including both the Current Employment Statistics (CES) and Local Area Unemployment Statistics (LAUS) surveys. While the household survey showed a modest increase of 2,095 jobs in May, the establishment survey reflected the broader employment losses.
The state’s labor market remains relatively competitive, but analysts note the persistent slowdown in job creation may pose longer-term challenges if the trend continues through the remainder of 2025.
