Introduction

In August 2024, Common Sense Institute raised early warnings about persistent inflation and emerging labor market softening across Iowa and the broader Midwest. At the time, these concerns ran counter to prevailing perceptions of economic stability—characterized by low national unemployment and gradually easing inflation. One year later, new data confirms CSI’s concerns were well-founded.

In 2025, Iowa is facing economic headwinds. Private-sector employment is contracting, WARN filings are accelerating, and the state’s unemployment rate has climbed to its highest level since 2021—though still lower than the national average. At the same time, Midwest inflation has reemerged as a pressing concern, keeping pace with the national average and placing renewed strain on household budgets. Between May and June 2025 alone, year-over-year inflation in the Midwest jumped from 2.4% to 3% but fell back to 2.6% in July. Compared to January 2021, the typical Midwestern household now spends nearly $1,000 more per month to maintain the same standard of living.

This report revisits observations and warnings from CSI’s  August 2024 report, Iowa Inflation, Employment, and Economic Update - July 2024 (henceforth “mid-2024 economic update”),  in light of the latest available economic data. It evaluates how closely the state’s current economic conditions align with CSI’s predictions in mid 2024 and identifies continued risks to Iowa’s economy. Finally, it suggests metrics to monitor for clues of what to expect next.

Key Findings

• In June, Iowa’s unemployment rate saw its narrowest advantage over the U.S. rate since 1987. The unemployment rate rose to 3.7%, shrinking Iowa’s lead over the national average to just 0.4 percentage points (U.S. rate of 4.1%).
  • Iowa’s cumulative nonfarm employment growth since 2021 was 4.6% as of July 2025. Over the same period, cumulative growth at the national level rose to 11.6%.
  • Private-sector employment in Iowa has contracted over the past year. From August 2024 to July 2025, private-sector jobs fell by 8,100, with the largest declines in manufacturing (–5,000) and professional and business services (–4,700).
  •  Layoff notifications announced through WARN Act filings affected 4,685 workers statewide through July 2025—the highest midyear reading in the post-pandemic period.
  • Between January and July 2025, Iowa’s labor force participation rate rose from 67.0% to 67.4%, while the unemployment rate increased from 3.3% to 3.7%, indicating more people are seeking work but a shrinking number are finding jobs.
•  Midwest inflation has remained above the Federal Reserve’s 2% target since March 2021, elevating the risk of stagflation.
  • Annual inflation reached 2.6% in July 2025—right below the U.S. rate of 2.7%—adding an estimated $992 per month to typical household costs since January 2021.
  • Consumer prices have risen by 23.6% in the Midwest since January 2021 (versus 23.5% for the U.S.), costing the typical Iowa household over $36,000 in total to maintain the same standard of living.
  • As of July 2025, consumer prices in the Midwest have risen 23.6% while Iowa weekly wages increased just 14.6%. Nationally, consumer prices have risen 23.5% while weekly wages have grown only 19.2%.

Economic Outlook:

The U.S. and Iowa economies remain resilient but on shaky footing. Job growth appears to be plateauing. If the Fed lowers interest rates to prop up the labor market, it risks a resurgence of inflation before ever seeing a return to its 2% target. Iowa’s relatively low levels of unemployment and its relatively high LFPR are its saving grace right now, but those too now show signs of weakening. After negative GDP growth in Q1, the U.S. avoided a technical recession with a positive Q2 GDP print. If Iowa’s Q2 GDP numbers, published next month, show the state has entered a technical recession, a subsequent increase in unemployment—combined with its persistently high inflation—would result in textbook stagflation for the state.^[1] Looking forward, it will be important to monitor the U.S. Federal Reserve’s September 2025 FOMC meeting, employment data, and Q2 state-level GDP data.

The Dual Mandate

In its mid-2024 economic update, Common Sense Institute examined whether the Federal Reserve (“the Fed”) could achieve its dual mandate and deliver a “soft landing”—bringing inflation down to its 2% target without triggering a recession or sharp rise in unemployment.^[2] The question was timely. In early August 2024, BLS data showed the U.S. added 35% fewer jobs than expected in July, and the unemployment rate had risen to 4.3%—its highest level since 2021. Inflation was cooling, but interest rates remained elevated. Uncertainty clouded the outlook.

At that time, CSI cautioned, “[A]s the Fed keeps interest rates high and reduces its balance sheet to stabilize inflation, the Phillips Curve predicts the labor market will react inversely.”^[3] In other words, the longer tight monetary policy persisted, the more likely it would slow hiring and raise unemployment. Nearly a year later, both the U.S. and Iowa economies have technically avoided recession and sharp employment declines, but economic headwinds persist. The following subsections explore how employment and inflation in the United States have responded since August 2024. The report also evaluates the accuracy of CSI’s August 2024 predictions, considering how the economy has evolved since then.

Inflation remains low, but above the Federal Reserve’s 2% target

About one month after the release of CSI’s mid-2024 economic update, the Federal Reserve began cutting the federal funds rate, lowering it from 5.33% in August 2024 to 4.33% by January 2025 where it has since held steady. Prior to these cuts, inflation was trending back toward the Fed’s 2% target. Since the rate cuts, however, the prior disinflation trend has grinded to a halt. The United States has not seen 2% or lower inflation since February 2021. Figure 1 visualizes federal fund effective rates alongside all item, annual inflation rates in the U.S. since January 2021.

Figure 1. Effective Federal Fund Rate and All Item CPI in the United States, January 2021 to July 2025

Source: Bureau of Labor Statistics, Federal Reserve Bank

Shortly after the Fed began increasing the federal funds rate in early 2022, the U.S. year-over-year inflation rate began falling. Inflation continued to fall precipitously as the Fed raised rates into mid-2023. The 12-month CPI rate continued to drop less steeply as the Fed held interest rates steady at 5.33% from August 2023 through August 2024. Over the 5-month period from September 2024 through January 2025 when the Fed lowered interest rates by 100 basis points, the falling federal funds rate maintained a direct inverse relationship with the annual inflation rate. As interest rates fell, inflation rose. Inflation has cooled again since the Fed began holding rates steady at the start of 2025, but they never returned to the Fed’s 2% target. As of July 2025, U.S. inflation is 2.7%.

At the regional level, the story is similar. Figure 2 presents annual inflation trends across the four major U.S. Census regions. Since peaking in mid-2022, inflation has declined across all regions; only the South ever reached the 2% target. In the Midwest—which includes Iowa—inflation has remained stubbornly above target, averaging closer to 2.6% in recent months.

Figure 2. Annual Inflation Rate by Census Bureau Region, January 2021 to July 2025

Source: Bureau of Labor Statistics

While the recent trend marks progress from inflation’s 2022 high mark, the Federal Reserve has yet to achieve its “price stability” mandate. In the Midwest, price growth hit 3% again in June 2025 but fell back to 2.6% in July. Consumer prices have risen a cumulative 23.5% in the U.S. since January 2021 and 23.6% in the Midwest. As a result, the average Midwest household has spent a total of $36,346 to maintain the same standard of living as in January 2021. In July, that household spent $992 more to maintain their standard of living. Persistent inflation at these levels erodes household purchasing power, especially when coupled with modest wage gains.

Wage growth is a key benchmark for household well-being, particularly when persistently high inflation erodes purchasing power. If wages rise in step with inflation, the impact on households is largely neutral. But when wage growth falls behind, families face a heavier burden to maintain their standard of living. Figure 3 captures both CPI and weekly wage growth in Iowa and the United States, illustrating how inflation has affected the average Iowan.

Figure 3. Cumulative Percent Change in All-Item Consumer Price Index and Weekly Wages, January 2021 to July 2025

Source: Bureau of Labor Statistics
Note: Midwest inflation is used for Iowa. Weekly wage and all-item CPI data for Iowa, the Midwest, and the United States are non-seasonally adjusted.

Weekly wage growth has kept pace with all-item inflation in neither the United States nor Iowa since January 2021. Nationally, consumer prices have risen 23.5% while weekly wages have grown only 19.2%—a 4.3% gap. In Iowa, that gap is much wider. As of July 2025, consumer prices in the Midwest have risen 23.6% while wages increased just 14.6%. This 9.0% gap between price increases and wage growth in Iowa is more than double the national shortfall. This is problematic because wage growth is the primary means through which households absorb higher prices. When earnings lag so far behind, families see their purchasing power steadily eroded. Iowans are at an even greater disadvantage, as their wage growth has trailed inflation by a wider margin than the nation overall, resulting in a heavier burden on households.

While inflation and wage trends alone signal a strain on households, these data are only part of the story. Pressures in the labor market add another layer of concern. Common Sense Institute’s August 2024 report noted:

While the U.S. labor market has remained relatively resilient since this time last year (see figure 4), several factors now threaten to stall this progress. Some were expected—such as cooling job growth and gradual increases in unemployment. Others have emerged more recently, including renewed tariffs and political pressure for further monetary easing. These dynamics have fueled expectations of a 25-basis-point rate cut at the Federal Reserve’s September 2025 meeting.^[5] Yet the Fed faces a delicate trade-off. Cutting rates too aggressively could reignite inflation just as it was nearing its target. But maintaining tight monetary policy for too long could further weaken the labor market. The next section explores whether employment trends are showing signs of broader strain—raising questions about whether the Fed can fully deliver on both sides of its dual mandate.

U.S. employment remains resilient with signs of weakening

In August 2024, the three-month moving average of the national unemployment rate rose by at least 0.5 percentage points over the prior year, triggering the Sahm Rule—a commonly used early warning indicator for recessions. The rule’s creator, economist Claudia Sahm, however, cautioned, “[T]his time, the economy does not look like it’s in a recession.”^[6] She was right: the U.S. economy avoided a technical recession in the months that followed. Since then, employment has continued to grow modestly, and the national unemployment rate has stabilized around 4.2%. This resilience has been supported, in part, by the Federal Reserve’s decision to cut interest rates by 100 basis points between August 2024 and January 2025. While those rate cuts slowed the disinflation trend, they helped sustain labor market momentum. Figure 4 illustrates these dynamics, showing total U.S. nonfarm employment, the unemployment rate, and effective federal funds rates from January 2021 through July 2025.

Figure 4. Effective Federal Fund Rate, Nonfarm Employment, and Unemployment Rate, United States, January 2021 to July 2025

Source: Bureau of Labor Statistics, Federal Reserve Bank

The U.S. labor market remains strong, but early signs of weakening have emerged. Employment growth appears to have plateaued, and the unemployment rate has held steady around 4.2% for just over a year. If growth were to continue plateauing, persistently high interest rates could be seen as counterproductive. The Fed’s rate cuts helped stabilize the labor market in late 2024, but they also marked the premature end of disinflation. This underscores the challenge of achieving both sides of the dual mandate simultaneously. Had the Fed not lowered interest rates last year, inflation may have continued trending toward 2%, but it may have come at the cost of higher unemployment. Instead, the Fed chose to support employment at the risk of leaving inflation slightly elevated. If the Fed lowers rates again this September, as most analysts predict, that could send inflation higher.^[7]

Taken together, the inflation and employment data suggest the Federal Reserve has so far navigated a difficult economic landscape with more success than failure. While inflation has not yet reached the Fed’s 2% target, it has come down substantially from its 2022 peak. At the same time, employment has continued to grow modestly, and unemployment has stabilized, defying earlier recession warnings such as the Sahm Rule trigger in August 2024. But that national performance does not guarantee equally positive outcomes at the state level. The Federal Reserve’s dual mandate is national in scope and does not account for regional disparities.

Regional labor market strains are emerging

Since individual regions’ employment data may not mirror national trends, this section explores Midwest regional data to shed light the condition of Iowa’s labor market. Given recent uncertainties around the reliability of BLS jobs data, CSI matches ADP employment data against BLS data to confirm employment trends in the region.^[8] Automatic Data Processing, Inc. (ADP) is a company, which provides human resources software for companies globally. Data from BLS relies on companies answering surveys; ADP’s National Employment Report consists of real payroll data from over 25 million U.S. employees.^[9] While BLS data shows continued employment growth in the Midwest, ADP’s West North Central (WNC) regional dataset, which includes Iowa and its neighboring states, suggests labor market softening may already be underway in the Midwest. Private-sector employment across the WNC region has slowed noticeably in recent months, according to ADP.

Figure 5. Monthly Private Employment Levels, West North Central Region, January 2021 to June 2025

Source: Bureau of Labor Statistics, ADP
Note: West North Central states include Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota

A troubling divergence emerges between BLS and ADP data for the NWC region in mid-2025. While BLS data indicates regional employment remains stable, ADP’s real-time payroll estimates show a sharp decline in June followed by only a partial rebound in July—leaving levels below May’s estimates. Discrepancies between ADP and BLS figures are not uncommon, as ADP typically reports lower employment. However, the severity of the June 2025 drop is notable and may signal that Iowa’s labor market is weakening more than federal data suggests. Alternatively, the decline could resemble the short-lived divergence between ADP and BLS data seen in May 2021. That divergence was followed by a sustained recovery in both datasets. The coming months will clarify whether recent trends reflect a temporary setback or the onset of a broader slowdown. To better understand Iowa’s position in this uncertain environment, the next section turns to state-level indicators that may reveal whether a soft landing is underway for Iowa or slipping out of reach.

A Closer look at Iowa

While the national labor market has continued to show resilience, Iowa’s employment recovery appears to be underperforming. In its August 2024 report, CSI indeed warned that if Iowans continued to leave their jobs and exit the labor force, “it could signify the looming impacts of the Fed’s headstrong battle against record inflation and a possible slowdown in the state’s economy.”^[10] As shown in Figure 6, part of that concern has found itself in the latest 2025 data. Figure 6 visualizes cumulative nonfarm employment in the United States and Iowa since January 2021. While the U.S. has grown steadily, Iowa’s employment gains have slowed noticeably over the past year, with cumulative growth beginning to flatten in late 2023.

Figure 6. Cumulative Nonfarm Employment Growth since January 2021, United States and Iowa

Source: Bureau of Labor Statistics

As CSI previously cautioned, Iowa’s post-pandemic job growth may have peaked prematurely relative to the U.S. Cumulative employment growth climbed to 5.4% in March 2024, but gains have since reversed to 4.6% as of July 2025. Over the same period, cumulative growth at the national level continued to rise from 10.2% to 11.6%. This growing gap suggests Iowa is not experiencing the same momentum seen across the broader U.S. Some experts have attributed recent job stagnation from the weakening agricultural and agriculture-related manufacturing sectors, which make up a significant portion of Iowa’s broader economy.^[11] While the national economy has managed to sustain job gains even after interest rates peaked, Iowa’s labor market is losing steam. The following subsections examine Iowa-specific labor market indicators in more detail to better assess the condition of the state’s labor market.

Private employment levels are contracting across Iowa

Employment over the last year has continued to contract. Iowa shed 5,400 nonfarm jobs between August 2024 and July 2025. The steepest losses occurred in manufacturing (–5,000) and professional and business services (-4,700), which together accounted for 9,700 job losses—nearly double the net statewide decline. Iowa’s manufacturing sector is largely comprised of firms connected to the agricultural industry, including John Deere, Tyson, Corteva, Vermeer, and JBS.^[12] The BLS super sector “Professional, Scientific, and Technical Services” includes three sectors: Professional, Scientific, and Technical Services, Management of Companies and Enterprises, and Administrative and Support and Waste Management and Remediation Services.^[13] These include a wide range of industries such as legal services, accounting, advertising, management, administrative support, and waste management, to name a few. Figure 7 visualizes the number of jobs added or lost to each major industry from August 2024 to July 2025, according to the Bureau of Labor Statistics establishment survey.

Figure 7. Change in Employment Level by Major Industry, Iowa, August 2024 to July 2025

Source: Bureau of Labor Statistics

Private employment, which excludes government jobs, fell by 8,100 over the year. Losses were broad-based, also affecting leisure and hospitality (–4,300), trade and transportation (–3,800), and financial activities (–1,900). Only a few areas saw gains. Education and health services (+5,400), construction (+4,900), and other services (+1,500) added jobs, but these were not enough to counteract the downturn in the other private-sector industries.^[14]

Figure 8 depicts the cumulative change in private employment over time, offering a useful lens into longer-term trends. The figure disaggregates cumulative Iowa private employment levels into five post-pandemic years. Cumulative job growth reflects the total number of jobs gained or lost within a given calendar year and is especially useful for identifying momentum. Iowa posted strong cumulative gains in 2021 and 2022, as the state rebounded from the initial pandemic shock. But in 2023 that momentum began to slow, and by 2024 it had reversed entirely.

Figure 8. Annual Cumulative Private Employment in Iowa, 2021 to 2025

Source: Bureau of Labor Statistics

Early indicators in 2025 offer little optimism. Modest job gains in the first quarter gave way to stagnation by May and net losses in jobs by June. Net losses continued into July but are slightly outperforming 2024 private job trends year-to-date. As of July, Iowa was one of only eleven states with negative cumulative private job growth since December 2024. This pattern suggests the 2024 employment downturn in Iowa was not a temporary post-pandemic correction but potentially the onset of a longer-term erosion in the state’s private employment base.

These findings reinforce the concerns outlined in CSI’s July 2024 report, which warned of deeper structural weaknesses in Iowa’s labor market. The private-sector contraction over the last year is on par with the year-over-year contraction observed in CSI’s mid-2024 economic update, which was the worst since the pandemic. The sustained losses across diverse industries, particularly those most sensitive to consumer demand and global supply chains, may warrant closer attention.

Layoff activity provides further evidence of mounting labor market stress. Figure 9 tracks the cumulative number of Iowa workers affected by WARN (Worker Adjustment and Retraining Notification) Act filings across recent years. Under the WARN Act, employers with 100 or more employees must provide at least 60 days’ notice before mass layoffs or plant closures affecting 50 or more workers.^[15] The trajectory in 2024 was severe, with more than 6,500 employees impacted. Alarming trends continue in 2025. From the start of the year through just the second quarter, over 4,685 workers have already been affected—the most of any post-pandemic year.

Figure 9. Annual Cumulative Number of Affected Employees by WARN Notifications, Iowa

Source: Iowa Workforce Development
Note: Data through July 31, 2025. The final total cumulative number of affected employees in 2025 will likely be higher by end of year.

Quarter 2 of 2025 shows the highest WARN activity at that point of all post-pandemic years. These figures suggest job losses reflected in private employment data (Figure 8) are not merely the result of slower hiring but of significant and ongoing layoffs. Importantly, this is happening even as labor force participation has increased—from 67.1% to 67.4% over the same period. Rising participation alongside falling employment implies more people are actively seeking work but not finding it—leading to increased unemployment. In other words, Iowa’s private-sector employment base could be contracting amidst rising labor supply and weakening demand. The following subsection goes into further detail on this concern.

Unemployment and labor force participation metrics creep upwards

Revisions to BLS unemployment data since CSI published its mid-2024 economic update have turned cautious optimism about Iowa’s labor market into concern. In August 2024, BLS reported Iowa’s unemployment rate at 2.8% and the U.S. rate at 4.1% for July 2024. This came as no surprise. Historically, Iowa’s unemployment rate stays lower than the U.S., but it generally follows the same trend. In August 2024, however, the latest BLS data showed an unusual divergence in the directional trend of the U.S. and Iowa’s unemployment rates. Iowa’s rate was headed lower as the U.S. was rising. The mid-2024 CSI economic update concluded:

Revisions BLS made to its data after the release of CSI’s report turn this conclusion on its head. The BLS later revised Iowa’s July 2024 unemployment rate upward by 0.3% to 3.1% and the U.S. unemployment upward by just 0.1% to 4.2%. In the subsequent 12-month period, Iowa’s unemployment rate rose significantly, hitting 3.7% in July 2025. Today, the U.S. unemployment rate remains at 4.2%, equal to the revised figure for last July. Common Sense Institute noted that the divergence in the U.S. and Iowa data sets was unusual but concluded—based on BLS’s faulty data—that Iowa may see continued strength its economy even as the U.S. weakens. Updated labor market data now indicates the opposite. Iowa’s unemployment rate has broken from the U.S. trend in the opposite direction over the last year, deteriorating as the U.S. holds steady.

Figure 10. Unemployment Rates, Iowa and United States, January 2021 to July 2025

Source: Bureau of Labor Statistics
Note: The dotted lines represent the preliminary estimates available in August 2024. In February 2025, the Bureau of Labor Statistics revised its benchmark to the data in the solid lines.

While incorrect data led CSI’s mid-2024 economic update into unfounded optimism, the updated data is consistent with the report’s warning that elevated interest rates could eventually erode Iowa’s labor market advantage. Indeed, while Iowa’s most recent unemployment print of 3.7% remains below the U.S. rate of 4.2%, its marks the highest unemployment rate for the state since August 2021. That may appear relatively low in historical terms, but the direction and pace of change are notable. Over the same period the U.S. unemployment rate remained flat, staying within a narrow range of 4% to 4.2%. For years, Iowa consistently maintained a wide lead over the national average in terms of labor market strength. That margin collapsed to just 0.4 percentage points in June 2025—the smallest gap since September 1987. While the gap has widened slightly to 0.5 percentage point in July, the gradual narrowing of the gap underscores the erosion of Iowa’s labor market advantage.

Historically, Iowa’s unemployment rate has functioned as a barometer of state-level economic resilience. A reversal in that trend—especially one that diverges from the national average—reinforces concerns about underlying weaknesses specific to Iowa’s economy. Coupled with labor force participation trends, the outlook becomes even more concerning. Figure 11 visualizes Iowa’s labor force participation rate alongside its unemployment rate from January 2021 to July 2025.

Figure 11. Unemployment Rate and Labor Force Participation Rate, Iowa, January 2021 to June 2025

Source: Bureau of Labor Statistics

In recent months, the unemployment rate and labor force participation rate have risen in tandem. From January to July 2025, the state’s unemployment rate rose from 3.3% to 3.7% (+0.4%). Meanwhile, the labor force participation rate increased from 67.0% to 67.4% (+0.4%). A rise in labor force participation generally indicates growing confidence in the labor market as more individuals begin actively seeking work. In Iowa’s case, however, this dynamic has coincided with a rising unemployment rate and net job losses, suggesting newly active workers are entering a labor market that is shedding jobs rather than creating them. In Iowa, demand for labor is weaking just as more working-age adults are entering the labor market seeking work. Consequently, more job seekers are competing for fewer positions—causing both unemployment and labor force participation to rise together. Though less severe in degree, the data has developed similarly at the national level. Employment seems to have plateaued amid a decline in labor force participation rate—from 62.6% to 62.2% (-0.4%)—and a rise in unemployment—from 4.0% to 4.2% (+0.2%). Unlike Iowa, however, U.S. job growth has merely slowed rather than turned negative.

This pattern highlights a broader concern that Iowa’s economic conditions are diverging from national trends. While the U.S. has maintained modest employment gains, Iowa’s labor market appears to be under increasing strain. If job losses continue and hiring fails to rebound, the state could face a prolonged period of labor market weakness, even as inflation remains relatively low. Despite the weaking trend in Iowa relative to the U.S., Iowa continues to maintain a higher LFPR and lower unemployment rate than the U.S.

Looking Forward

Despite persistent warning signs in the economic data, both the U.S. and Iowa economies have remained clear of a recession. Nonetheless, as the second half of 2025 continues the outlook for both remains highly uncertain. National indicators have so far avoided signaling a clear recession, but recent developments suggest the economy is entering a more fragile phase.

The U.S. labor market is mixed. On the one hand, the BLS revised data downward for June, and employment growth may be reaching an apparent plateau. On the other hand, the BLS reported employment growth in July, providing hopes of continued growth.^[17] While early signs of weakening have emerged, the U.S. labor market remains strong overall. For Iowa, the warning signs are more immediate.

The state has experienced negative job growth since 2024. While the rising labor force participation rate means that new workers are entering the labor market, the coincident increase in the unemployment rate and the drop-in employment suggests the state’s economy is not creating jobs for them to fill. Sectors such as manufacturing and business services continue to shed jobs, and WARN filings point to persistent layoff activity.^[18] These data bode poorly for the state’s economy.

In its mid-2024 economic update, CSI noted that employment data can serve as an important indicator of economic health. Indeed, the plateau in U.S. employment growth and a weakening labor market in Iowa coincided with negative GDP growth in Q1 2025 for both the U.S. and Iowa.^[19] The U.S. printed positive GDP for Q2, avoiding a technical recession.^[20] If Iowa prints another quarter of negative growth when Q2 GDP numbers on September 25, it will be in a technical recession.^[21] Meanwhile, inflation remains stubbornly elevated above the Fed’s 2% target. Its relatively low levels of unemployment and its relatively high LFPR are its saving grace right now, but those too now show signs of weakening. If the state enters a technical recession with rising prices and rising unemployment, it enters stagflation.^[22] Looking ahead, three data points will be especially important to monitor:

1. The U.S. Federal Reserve’s September 2025 meeting. Currently, the Fed is expected to consider a 25-basis-point rate cut.^[23] While a rate reduction could provide relief for employers, it also risks slowing disinflation or reigniting inflationary pressures.
2. Employment. For Iowa, further private-sector job losses would signal that current weaknesses are not temporary.
3. Quarter 2 2025, state-level GDP data. This will offer a clearer assessment of whether Iowa’s early-year contraction is deepening or beginning to stabilize.
   

Endnotes