Weekly Economic Trends and Indicators

The Headlines:

According to the Bureau of Labor Statistics (BLS), total nonfarm payroll employment in the Quad Cities metro area was approximately 179,700 in August which is down about 2,600 jobs compared to last August. The unemployment rate in the metro area stood at 4.9% in August, which was down from 5.1% in July but up from 4.4% last August.

The Details:

For the Quad Cities, an unemployment rate of 4.9% is still quite good by historical averages. After the “Great Recession” which began at the end of 2007, the unemployment rate in the Quad Cities did not go below 5% until May 2016. There has been a decrease in the number of people employed recently, and the layoffs announced this summer are starting to be noticed in the data. However, the much larger factor in what we are seeing is a decline in labor force participation compared to a year ago. The Quad Cities’ labor force never fully recovered after COVID, but even in the last twelve months the numbers have dipped slightly. “Baby Boom” generation retirements are part of the reason, as is a move toward the “gig economy” which is harder to measure. There also may be a skills mismatch between available workers and jobs in some cases.

The Context:

We see some of these trends in the Laborshed Workforce Report released by Iowa Workforce Development. This laborshed study looks at the entire area in which a significant number of people commute to jobs in the Quad Cities metro area. As you might expect, this area extends well beyond the metro area itself and even beyond the Chamber’s six-county service area. Our laborshed extends as far as Iowa City, Dubuque and Galesburg. Since the last laborshed study in 2021, the number and percentage of self-identified unemployed people has increased. As these are self-identified as unemployed in the study, it is possible that many of them are showing up as “not in the labor force” in the BLS data. At the same time, the percentage of self-identified homemakers and retired individuals willing to accept employment has increased. This suggests that some of these people may be homemakers or retired mainly because of changes brought on by the post-COVID labor market and would return to the labor force if they found a suitable job. These individuals may also be showing up as “not in the labor force” in BLS data, but they would be more likely to return than conventional wisdom would suggest.

Another interesting finding in the report is that commuting times and distances have increased since 2021. Especially in today’s housing markets, it may be more economical for people to drive a little longer rather than move to another city. This is more evidence to suggest that employers should look at labor availability in the entire laborshed, not only in a specific municipality.

For more on how the local labor market has changed, see the recently updated Laborshed Workforce Report.  

Next week: Productivity and inflation