CORONAVIRUS

Iowa unemployment rate up to 10.2 percent in April as pandemic takes economic toll

April numbers show stark contrast from 3.8 percent unemployment in March, 2.7 percent unemployment last year

#x201c;We remain hopeful that, as we reopen the state and more people return to work, the rate will decrease quickly and
“We remain hopeful that, as we reopen the state and more people return to work, the rate will decrease quickly and this unprecedented rate will be a very temporary one,” says Iowa Workforce Development Director Beth Townsend. (Associated Press)

Iowa’s unemployment rate jumped to 10.2 percent in April, Iowa Workforce Development said Friday, as the coronavirus pandemic forced many businesses to enact furloughs and layoffs.

It’s slightly better than the national unemployment rate for April — at 14.7 percent.

At this time last year, the state unemployment rate was 2.7 percent. The new figure also was a sharp increase from 3.3 percent unemployed in March.

“April is the first month we have seen the real impact of the pandemic on our unemployment rate,” said Beth Townsend, director of Iowa Workforce Development, in a statement.

“We remain hopeful that, as we reopen the state and more people return to work, the rate will decrease quickly and this unprecedented rate will be a very temporary one.”

Leisure and hospitality saw the biggest loss of any sector, shedding 68,500 jobs, or 48.9 percent of all staff on payroll.

Retail experienced a 12.8 percent loss in jobs.

The April unemployment rate in Iowa is higher than in either of the last two recessions. It’s also the first time Iowa unemployment to rise above 6 percent since 2010.

During her daily COVID-19 briefing Friday morning, Gov. Kim Reynolds said she expected Iowa’s jobless rate will work itself downward now that she has begun the process of reopening businesses and attractions since May 1, as the state expands its coronavirus testing capabilities and continues mitigation practices that have slowed the virus spread.

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“As we continue to move into the recovery phase and we continue to ease the mitigation restrictions that we’ve put in place, that’s going to help I think with Iowa’s unemployment numbers,” Reynolds said.

“As we begin to open up and get Iowans back to work, then hopefully businesses will see their numbers rebound and come back from COVID-19,” she added.

The governor also told reporters she did not believe the record payout in Iowa’s unemployment insurance benefits will trigger an increase in the rates employers pay into the trust fund via payroll taxes that covers jobless claims.

Reynolds said Iowa has been certified to use a share of its $1.25 billion in federal CARES stimulus money to replenish the unemployment trust fund. That fund began the year with a $1.26 billion balance before Reynolds issued a public health disaster emergency in March that closed businesses and idled a record number of Iowa workers.

The governor said her administration is monitoring the situation on a weekly basis. She said she expects to make a decision next week regarding the trust fund “trigger’ and “how that will impact businesses across the state” given the clarification that federal CARES funds could be used to refill the trust fund.

The state unemployment rate only accounts for those actively looking for a job, and does not include those who’ve stopped seeking employment, cycled out or have otherwise dropped out of the system.

Gazette Des Moines bureau reporter Rod Boshart contributed to this report.

Comments: john.steppe@thegazette.com

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