Weekly Economic Trends and Indicators
Overall economic performance in 2025 was mostly positive, despite being somewhat uneven, at the national level. Trade policy uncertainty put several components of GDP on a roller-coaster throughout the year, but investment in artificial intelligence (AI) technologies helped to boost spending. Then as the year came to a close, the evidence of slowing in the U.S. labor market caused some forecasters to look for a weaker 4th quarter. Locally, the labor market slowdown started in 2024. Does that mean we are closer to a turning point? What can we expect for the upcoming year, particularly for the Quad Cities regional economy?
While metro area job market data is still delayed by the federal government shutdown, we can look at other sources of data. Job posting data from Lightcast, a labor market analytics company, showed 14,200 unique job postings in the six-county combined statistical area (the metro area plus Clinton and Muscatine counties) for October through December—nearly identical to the number of postings for the same period in 2024. One important difference, however, is that the median posting duration is somewhat shorter (18 days) than in the same period last year (27 days). This suggests that job/employer matches are happening somewhat faster than a year ago. In turn, this could indicate that the labor market is working more efficiently with qualified workers re-entering the market.
Though matches are happening faster, the number of job postings has not picked up appreciably, so we are likely to see stable employment numbers at least through December. Employment in construction and health care is likely to rise going into the new year. However, jobs in manufacturing, hospitality, and professional and business services may be tougher to budge. Manufacturing employment, especially for sectors that are heavily dependent on trade, will depend on how quickly the economy can adjust to the new tariff environment. If that adjustment happens quickly, we could see a more robust recovery in the entire labor market.
Employment in export manufacturing (a significant portion of the Quad Cities economy) is also helped by a weaker dollar. After peaking a year ago, the broad dollar index is down about 7%. However, the index is still 5 to 10% higher than in 2021 or the pre-COVID years. If the dollar hovers around its current level, it would be difficult for exports to recover enough to boost employment and GDP. If the Federal Reserve is a little more dovish on interest rate policy in the new year—as many are expecting—it could push the dollar lower.
If everything lines up nicely (lower interest rates, lower dollar, trade certainty) the best-case scenario could push GDP growth for the Quad Cities closer to 2% with employment growing by as much as 1,000-2,000 (which would represent a return to 2024 levels). On the other hand, if the interest rate cuts are not as aggressive, the dollar remains elevated, and the economy has difficulty adjusting to the new trade environment, it would most likely lead to GDP growth under 1% with zero employment growth. Those possibilities represent the most likely extremes cases, with the determinants of the outcome based on national and world events largely beyond our control.
One wildcard in this forecast is the national labor market, which has been slowing. Because of the characteristics of the Quad Cities economy, it is possible that we simply started feeling that effect sooner than the rest of the country and that we are closer to the turning point. Still, a broader national slowdown (possible, though becoming less likely) would have a negative impact on the Quad Cities economy. This week’s December U.S. employment report will be closely watched in this regard.
Next week: U.S. labor market update
