Iowa’s unemployment rate dropped to 5.6% in December, the lowest level since June 2009. Iowa Workforce Development spokesperson Kerry Koonce says the December report shows the state’s economy has improved a quite a bit over the last year.

The unemployment rate is down from 5.7% in November and 6.1% in December 2010. An estimated 93,500 Iowans were unemployed last month. That’s down from 102,600 one year ago.

“What we’re also seeing is the size of our labor force is continuing to increase, which is a sign that individuals who had stopped looking for work are starting again,” Koonce said. The total number of working Iowans increased to 1,565,500 in December, up from 1,562,000 in November.

Overall for 2011, job gains were reported in seven months while job losses were reported in five months. The manufacturing sector has led the way in job gains in Iowa, adding 800 jobs last month and 8,600 jobs over the year.

“Most of that has been in durable goods…and that’s a sign of improved consumer confidence,” Koonce said. “People are buying more, so manufacturing is increasing and they’re adding jobs. Some of those were jobs that were lost and they’re either bringing people back or hiring new (employees).”

The education and health services sector added 5,200 jobs over the year. Construction lost 900 jobs in December, as that sector reached a seasonal low. “Construction, over the year, added 3,100 jobs. We lost some in December, but that’s typical for this time of year,” Koonce said.

“But, we’re so much stronger than we were at this time last year.” State and local government cut the most jobs in 2011, shedding 4,300 positions — including 1,100 in December. The leisure and hospitality sector trimmed 2,500 jobs in December.

Koonce said that sector is down just 400 jobs over the year, but there are often large fluctuations from month to month. Aside from government, the biggest job losses in Iowa occurred in financial services — down 2,300 jobs compared to December 2010.

“You saw a lot of the financial services industries adding jobs when they were modifying mortgages and those kinds of things. And now, as that piece of the industry has started to level off, you’re seeing decreases in those jobs,” Koonce said.

The U.S. unemployment rate dropped for the fourth straight month in December to 8.5%. That’s down from 9.4% in December 2010.