Palo suffered severe damage during the 2008 flood. Approximately 980 residents, the entirety of the town, were ordered to abandon their homes and businesses. The mandatory evacuation was ordered by the Linn CountyEmergency Management department, due to flooding from the Cedar River. The Duane Arnold Nuclear Energy Center, Iowa's only nuclear plant, located outside of Palo was not flooded.
As of the census of 2010, there were 1,026 people, 358 households, and 292 families living in the city. The population density was. There were 372 housing units at an average density of. The racial makeup of the city was 97.6% White, 0.5% African American, 0.1% Native American, 0.3% Asian, and 1.6% from two or more races. Hispanic or Latino of any race were 1.4% of the population. There were 358 households of which 48.6% had children under the age of 18 living with them, 69.6% were married couplesliving together, 6.4% had a female householder with no husband present, 5.6% had a male householder with no wife present, and 18.4% were non-families. 13.7% of all households were made up of individuals and 4.2% had someone living alone who was 65 years of age or older. The average household size was 2.87 and the average family size was 3.13. The median age in the city was 32.4 years. 32.3% of residents were under the age of 18; 4.7% were between the ages of 18 and 24; 34% were from 25 to 44; 22.1% were from 45 to 64; and 6.8% were 65 years of age or older. The gender makeup of the city was 51.6% male and 48.4% female.
2000 census
As of the census of 2000, there were 614 people, 247 households, and 170 families living in the city. The population density was 490.4 people per square mile. There were 251 housing units at an average density of 200.5 per square mile. The racial makeup of the city was 98.70% White, 0.16% African American, 0.16% Asian, 0.16% from other races, and 0.81% from two or more races. Hispanic or Latino of any race were 0.65% of the population. There were 247 households out of which 28.3% had children under the age of 18 living with them, 61.5% were married couples living together, 4.0% had a female householder with no husband present, and 30.8% were non-families. 23.1% of all households were made up of individuals and 8.9% had someone living alone who was 65 years of age or older. The average household size was 2.49 and the average family size was 2.94. In the city, the population was spread out with 25.1% under the age of 18, 5.7% from 18 to 24, 31.6% from 25 to 44, 28.3% from 45 to 64, and 9.3% who were 65 years of age or older. The median age was 38 years. For every 100 females, there were 96.2 males. For every 100 females age 18 and over, there were 99.1 males. The median income for a household in the city was $53,558, and the median income for a family was $58,571. Males had a median income of $39,167 versus $24,044 for females. The per capita income for the city was $21,429. About 1.1% of families and 4.6% of the population were below the poverty line, including none of those under age 18 and 18.6% of those age 65 or over.
