Weekly Economic Trends and Indicators

The Headlines:

The Bureau of Labor Statistics (BLS) recently reported that seasonally adjusted nonfarm payroll employment in the Quad Cities metro area decreased by 400 in May and now stands at 183,600, down from a revised 184,000 in April. The three-month average employment growth for May was +100. Prior to seasonal adjustment, nonfarm payroll employment was 184,500, an increase of 800 compared to April, but down by 2,500 from May of last year.

The unemployment rate for the metro area was 4.0% in May, up slightly from 3.8% in April.

The Details:

The mining, logging, and construction category added 300 jobs in May and has grown by 13.1% since May of last year. The 12,100 jobs in this category represents the highest level in the history of this dataset going back to 1990.

Other categories with monthly changes of more than 100 jobs in May were the following: private education and health services (-400), leisure and hospitality (+500), and government (+400). Employment figures in individual categories are not seasonally adjusted.

The decrease in private education and health services may represent a seasonal aspect that has become more pronounced since 2020. The increase in leisure and hospitality is comparable to seasonal increase in the past few years, but the level of employment in that category has lagged the previous year’s level for the last several months.

The Context:

Aside from construction, which continues to break records for employment locally, the Quad Cities labor market has been quite stable for the past few months. Demographic change and post-COVID-19 changes to the labor market provide some of the explanation.

Before the COVID-19 recession, the nationwide wave of retirements among the baby boom generation was slowly bringing the Quad Cities’ labor force numbers down from their peak in the mid-2000s. At the same time, the region was recovering from the recession brought on by the global financial crisis which briefly pushed unemployment to 10% locally.

By 2019, unemployment was solidly under 4%, and employment had been trending steadily upward in spite of the long-term decline in the labor force. Then the COVID-19 recession caused a labor market shock that depressed the labor force well below where it had been trending.

The recovery was swift, but incomplete, as post-COVID employment by 2025 was still about 5% below 2019 levels. A significant number of people did not reenter the labor force after the recession. Some of them would have been of the age demographic who would have expected to retire sometime between then (2020) and now. As a result, the working-age population is lower, which puts a limit on total employment.

At the same time, the types of jobs that are in demand are changing, which means that even as total employment remains stable, we can expect to see growth in skilled trades, health care, and jobs that utilize AI in any field. AI will be in especially high demand in manufacturing, as output demand increases faster than labor supply. In a future blog, we will look at those underlying trends to see where the labor market may be heading over the next few years.

Next week: U.S. labor market update