(This story was updated at 11:43 a.m.)
Iowa’s unemployment rate is rising. State officials estimate over 77,000 Iowans were unemployed in December.
"Fortunately Iowa is not anywhere near what the federal level is…for the nation, which is 7.2 percent," Iowa Workforce Development agency spokeswoman Kerry Koonce says. "But it does…show trends that, you know, our last quarter of 2008 and our first quarter of 2009 are going to show probably some continued increase and…some continued job loss as we’ve seen a number of layoffs that have been announced."
December’s unemployment rate of 4.6 percent is three-tenths of a percent higher than November. The head of the Iowa Workforce Development agency says that "large increase" in Iowa’s unemployment rate is due to "an acceleration in layoffs toward the end of the year." From November to December, an estimated 7,800 Iowans lost their jobs. That’s the largest month-to-month decline since October 2001 — right after the 9/11 attacks.
Peter Fisher, an economist who’s the lead researcher with the Iowa Policy Project, says that’s significant. "Particularly since we’ve had accounts of more layoffs since these statistics were generated, so it could well get worse, you know, in the next month of two," Fisher says.
After weathering the initial hits to the nation’s financial services sector, Koonce says Iowa’s professional and business services companies accounted for over half of the layoffs that happened in Iowa last month. "The Des Moines area, Principle Financial group, was one that would fall mostly into that area," Koonce says, "and we’ll see a few of those as we go across, compared to some of the other industries, which is just a byproduct of what’s going on across the financial services across the whole country."
Fisher, the economist, says the downturn in financial services shouldn’t be a surprise to anyone who’s listened to the news. "You know, entire law firms that have been around for 100 years closing and laying off hundreds of people at a time and, you know, businesses are not expanding," Fisher says. "They’re not hiring consultants to tell them how to build a new plant or develop new products, so I don’t think it should be a surprise that that sector’s feeling the crunch."
Layoffs in construction and manufacturing businesses accounted for most of the rest pink slips issued in Iowa in December. Koonce, of Iowa Workforce Development, says this latest report shows some Iowa businesses expanded their payrolls in December, however. "The education and health services category, most of it fell in health services, added 700 job over the month of December; leisure and hospitality added 1200 and trade and transportation increased by 400," Koonce says. "So unlike lots of portions of the national economy, Iowa is still having growth in some areas which is very important."
Koonce’s boss, though, is warning the first part of 2009 will be just the same as the last three months of 2008. "Which does not, is not countertrending at all towards what most economists are saying, that the first couple of quarters of 2009 we’ll not see any turn around yet," Koonce says.