‘The expectations are going to be for a very depressed job market for several quarters,’ a state economist said.

Iowa’s monthly unemployment rate in April reached 10.2%, the highest it’s been in the past 20 years, state data released today shows.

And while the state is allowing retailers, restaurants and other establishments to begin reopening, many business owners don’t expect to rehire all of the workers they laid off in mid-March when COVID-19-related shutdowns began, an indication high unemployment numbers will linger.

Sarah Pritchard, owner of Table 128 Bistro + Bar in Clive, employed 28 people in February. In the coming months, Pritchard said she’ll likely trim her staff to eight or nine. The restaurant, which has been open seven years, probably won’t reopen for lunch until at least July. She said she expects it to take several months before customers feel comfortable again dining in restaurants.
“Just to make it to 60% of our revenue before COVID, we’ll only operate with 30% of our staff,” Pritchard said. “That means layoffs.”

In a discussion this week with Iowa Rep. Cindy Axne, some restaurant owners indicated they may delay reopening their establishments or permanently close them, leaving hundreds, if not thousands, of Iowans without jobs. Another factor that will affect Iowa’s unemployment rate is the closure of stores by national retail chains like Pier 1 Imports and J.C. Penney.

Since mid-March, 46,288 Iowans who worked in the restaurant and accommodation sector have filed first-time unemployment claims, as have 31,006 who worked in the retail sector, Iowa Workforce Development data shows.

Those Iowans were among the 175,300 unemployed workers in the state in April, the new report shows. Of the 1.71 million people in Iowa’s workforce in April, 1.53 million were employed. 
April’s 10.2% seasonally adjusted unemployment rate is the highest since January 2010 when it reached 7.3% during the Great Recession.

“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,” Iowa Workforce Development Director Beth Townsend said in a prepared release. “The silver lining in this month’s report is that over 1.5 million Iowans remained in the workforce despite the pandemic and this will do the most to decrease the recovery time.”

In a workforce forum held in late April by the Business Record, Iowa State University economist Dave Swenson said that even as the state’s economy reopens, unemployment will remain high for most of 2020.  

“The expectations are going to be for a very depressed job market for several quarters — three, four, maybe five quarters — before we work our way out of this,” he said. “Unemployment is expected to be up and stay up for much of this year.”

A year ago, Iowa’s unemployment rate was 2.5%.

The seasonally adjusted jobless rate in the U.S. in April was 14.7%, according to the U.S. Department of Labor. Unemployment rates ranged from 7.9% in Connecticut to 28.2% in Nevada. 

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