Weekly Economic Trends and Indicators
The Headline:
The Bureau of Economic Analysis (BEA) recently released data on state-level GDP and personal income for the 3rd quarter of 2025. Real (inflation adjusted) GDP increased by 4.3% in Illinois and increased by 5.0% in Iowa (seasonally adjusted annual rates). Current-dollar (not adjusted for inflation) personal income increased by 2.6% in Illinois and increased by 3.7% in Iowa.
The Details:
The largest contributors to the rise in GDP in Illinois were information (0.65%), finance and insurance (0.63%), professional, scientific, and technical services (0.55%), and manufacturing (0.52%). Federal, state, and local government were a net negative contributor to GDP, pulling it down by 0.29%.
In Iowa, the largest contributors to GDP were finance and insurance (1.10%), agriculture, forestry, fishing, and hunting (0.86%), retail trade (0.64%), and manufacturing (0.49%). Within the manufacturing category there was a disparity between durables (contributing 0.78% to GDP) and nondurables (subtracting 0.29% from GDP). Federal, state, and local government subtracted 0.14% from GDP.
Iowa was tied with South Dakota for the highest increase in earnings (a component of personal income), increasing by 7.3%.
The Context:
Because of the importance of the agricultural economy to the Quad Cities (and the Midwest in general), the contribution of agriculture to GDP can be a useful indicator. In Iowa, it was the second largest single contributor to a very strong quarter. This was the largest contribution from agriculture to Iowa GDP since the first quarter of 2024. In Illinois, which also had a strong quarter, the mix of industries that contributed the most was quite different, with agriculture, forestry, fishing, and hunting essentially flat, subtracting 0.06% from GDP.
The exceptionally strong numbers for earnings in Iowa were also a welcome sign. It is too early to see the breakdown of how much agriculture, specifically, contributed to personal income, but this will be something to watch as the data becomes available.
Personal income per capita in both Iowa and Illinois has struggled to keep up with the national average recently, but that also appears to be turning around. After several years of stability, Illinois lost about 1 percentage point relative to the national average from 2023 through the first quarter of 2025. Iowa lost about 4 percentage points relative to the national average from 2022 to 2024. However, Illinois has essentially gained that back in the 2nd and 3rd quarters. Iowa gained back nearly 1 percentage point in early 2025 and has been stable since then. Overall, this report is encouraging, especially if it signals a continuing turnaround in agricultural earnings.
Next week: National and local economic conditions
