Iowa’s unemployment rate for April hit a historic high of 10.2 percent, up from 2.7 percent just one year ago. Iowa Workforce Development reported that the “number of unemployed Iowans jumped to 175,300 in April from 56,600 in March.” The national unemployment rate stood at 14.7 percent in April. Kevin Hassett, who serves as an economic adviser to President Donald Trump, estimates that unemployment could reach as high as 23 percent.
SOURCE: Iowa Workforce Development
“April is the first month we have seen the real impact of the pandemic on our unemployment rate. 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,” said Director Beth Townsend, Iowa Workforce Development. Director Townsend stated that 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.”
Governor Kim Reynolds is reopening Iowa’s economy, but uncertainty remains. As the economy reopens many small businesses are unable to “fully operate” because of social distancing requirements. In addition, fear of a second wave of the virus may limit the consumer behavior of Iowans. The question remains as to how long it will take for Iowans to feel comfortable fully reintegrating into public life.
The COVID-19 economic crisis is being referred to as the “Great Suppression.” The “Great Suppression” is different from past economic recessions or depressions because governments triggered the economic downturn in attempting to slow the spread of the virus. “Purposefully, and arguably necessarily, the government has prevented the production of goods and services. It has forced workers and consumers to stay home. It has massively suppressed the economy,” wrote John Hood, Chairman of the John Locke Foundation.
Reopening the economy will begin lowering Iowa’s high unemployment rate. Nevertheless, returning to normal will not happen in short order.