DES MOINES -- Iowa's mean income growth and job growth could slow down in 2009 while the state rebuilds from natural disasters and the national economy struggles with a housing and credit crunch, according to projections from officials in the state Council of Economic Advisors.

Average personal income grew by 5.3 percent in 2008, but that growth could drop to about 5 percent next year, said John Geweke, director of the University of Iowa's Institute for Economic Research and a member of the council.

Geweke also projected a drop in Iowa's nonfarm employment in 2009.

He said Iowa's nonfarm employment growth was about 0.2 percent in 2008, but he predicted a 0.4 percent drop in 2009.

"The employment picture is not good, but it's not a disaster. It's better than the rest of the United States," he said.

Iowa Gov. Chet Culver was in Washington, D.C., Friday to meet with federal officials about flood and disaster assistance, but he listened to Geweke's report via telephone.

Culver said Iowans are bracing for the effects of a national economic downturn, but he said the state has $640 million in reserves that could help lessen the impact of external economic conditions.

"I understand that Iowans have real concern, that there's a lot of anxiousness and some people are scared about what's going on and have felt the impact already," Culver said. "So I want to make sure we're making the right decisions, especially when the Legislature reconvenes, to take any and all steps necessary to keep our economy moving forward in Iowa."

Bob Baur, a global markets economist for Principal Financial Group, said Iowa banks will be insulated from the turmoil on Wall Street for the most part, but he said a government bailout package could help unfreeze credit markets.

Baur encouraged Iowa policymakers to boost incentives for small businesses to set up shop in Iowa as a means of protecting the state economy.

Contact Fred Love at (515) 243-0138 or fred.love@lee.net.