I L L INO I S ECO N OMI C
R E V I EW
The Monthly Illinois Economic Review contains information on national, statewide, and local
economic performance by measuring job growth, unemployment, and business activity. This
information is compiled by IGPA Economist Geoffrey Hewings, director of the Regional
Economics Applications Laboratory at the University of Illinois at Urbana-Champaign.
DEC 2012
EMPLOYMENT
E MP LOY ME N T DA TA S UM M A RY








Illinois added 16,400 jobs in Nov 2012, compared with a revised 3,200 job gains in Oct 2012.
Compared to Nov 2011, Illinois has added 53,200 jobs. The three-month moving average of
jobs, a more stable measure of labor market, was up by 9,900 jobs per month.
The Nation added 146,000 jobs at a rate of 0.11%, compared with a revised 138,000 job
gains in Oct 2012. The three-month moving average of jobs was up by 138,700 jobs per
month.
The Rest of the Midwest (RMW) added 3,300 jobs in Nov at a rate of 0.02% after a revised
19,200 job gains in Oct. The three-month moving average was up by 600 jobs per month.
Since the beginning of the recession in Dec 2007, Illinois has posted negative job changes
30 times and positive job gains 29 times so far. The state of Illinois now has a net loss of
260,500 jobs since the beginning of the recession in December 2007.
Since January 2010, when Illinois employment growth resumed after the national recession,
Illinois has added 145,800 new jobs.
The 12-month-ahead job recovery forecasts show that the future recovery rates will increase
for sectors such as Manufacturing, Trade, transportation & utilities, Financial activities,
Professional & business services and Leisure & hospitality. By Nov 2013, sector Other
services is likely to shed more than three times the jobs which were lost during the recession
period of Dec 2007-Dec 2009 while sectors such as Professional & business services and
Leisure & hospitality will recover to the previous employment peak level.
The shadow unemployment rates for Illinois, RMW and the Nation were 11.2%, 13.7% and
11.9%, compared to official unemployment rates of 8.7%, 7.2% and 7.8%.
Through Oct 2012, the cumulative job growth for Illinois, RMW and the Nation compared
to January 1990 stood at 8.71%, 10.97%, and 22.63%, respectively.
DEC 2012
December
2012
Positive
Total NonFarm
Employment
E MP LOY M E N T C HA RT
Oct 2011–Nov 2012
Last 12 months
Number of
Jobs
Nov 2012
Growth Rate
%
Number of
Jobs
Growth Rate
%
Shadow
U.R. **
Nation
0.11
146,000
1.43
1,889,000
11.9%
RMW*
0.02
3,300
1.25
234,000
13.7%
Illinois
0.29
16,400
0.94
53,200
11.2%
*RMW stands for Rest of the Midwest including six states, Indiana, Iowa, Michigan, Missouri, Ohio and Wisconsin.
**REAL has estimated a shadow unemployment rate; this is calculated as the unemployment rate that would be observed if labor force
2
participation rates matched the average for the 15-year period from 1990 to 2004.
T OTA L N O N - FA R M E M P L OY M E N T G ROW T H R A T E J A N 1990 – N OV 2012
130.00
125.00
120.00
115.00
110.00
105.00
100.00
National
RMW
IL
95.00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
LAST
12 M O N T H S T N F E M P L OY M E N T G ROW T H R A T E D E C 2011 – N OV 2012
Dec/11
Jan/12
Feb/12
Mar/12
Apr/12
May/12
Jun/12
Jul/12
Aug/12
Sep/12
Oct/12
0.50%
Nation
RMW
IL
0.40%
0.30%
0.20%
0.10%
0.00%
-0.10%
-0.20%
3
Nov/12
TOTA L N O N - FA R M E M P L OY M E N T G ROW T H R A T E B Y S E C TO R S
O C T 2012 – N OV 2012
20 Construction
30 Manufacturing
40 Trade, transportation & utilities
50 Information
55 Financial activities
60 Professional & business services
65 Education & health
70 Leisure & hospitality
80 Other Services
90 Government
-3.00%
-2.50%
-2.00%
-1.50%
-1.00%
-0.50%
Nation
S HA D OW
0.00%
0.50%
1.00%
RMW
1.50%
IL
UN E MP LOY ME N T
Unemployment Rate: Official and Shadow
The unemployment rate estimates the percentage of workers in the labor force who are currently
unemployed but who are seeking work. The labor force participation rate is the percentage of the
population 16 and older who are either working or actively seeking work. The participation rate has
declined since the 1990s and thus a number of analysts feel that the official unemployment rate does
not account for a larger number of people who have dropped out of the labor force. REAL has
estimated a shadow unemployment rate; this is calculated as the unemployment rate that would be
observed if labor force participation rates matched the average for the 15-year period from 1990 to
2004.







In the 1990s, the average participation rate was 68.2% in Illinois whereas in 2010, it has been
only 66.6%.
For the 15 years from 1990 to 2004, the average participation rate was 68.1% in Illinois.
In the 1990s in the US, the average participation rate was 65.5% whereas in 2010, it has been
66.0%; for the 15 years from 1990 to 2004, the average participation rate was 66.6%.
The figures on the next page show the difference between the official and shadow
unemployment rate for Illinois (top figure) and the US as a whole (bottom figure).
For Illinois since 2000, the gap between the official and shadow unemployment rate has
increased but recently since the early 2006 the gap has decreased. However, the gap has
increased significantly since 2008.
To bring the two together a further 172,100 jobs would need to be created in Illinois.
The gap at the national level is much smaller.
4
Illinois

14%
Unemployment Rate
Shadow Unemployment Rate
12%
10%
8%
6%
4%
2%
0%
US

14%
Unemployment Rate
Shadow Unemployment Rate
12%
10%
8%
6%
4%
2%
0%
5
E MPLOYMENT F ORECAST
Illinois
Total non-farm
Construction
Manufacturing
Trade, transportation & utilities
Information
Financial Activities
Professional & business services
Education & health
Leisure & hospitality
Other services
Government
Nov 2012
5,727,400
180,100
598,700
1,145,200
96,900
367,000
864,600
863,600
536,600
238,400
826,700
Nov 2013 (p)
5,818,600
170,800
603,800
1,174,100
93,000
372,900
893,800
888,400
549,500
236,900
835,400
Number of Jobs
76,600~91,200
-9,300
5,100
28,900
-3,900
5,900
29,200
24,800
12,900
-1,500
8,700
Growth Rate %
1.34%~1.59%
-5.16%
0.85%
2.52%
-4.02%
1.61%
3.38%
2.87%
2.40%
-0.63%
1.05%
* The values by sector for the number of jobs added are the lower bound of the forecast.
6
Employment Forecast for MSAs
Oct 2012*
Oct 2013
(p)*
Bloomington-Normal
90,900
Champaign-UrbanaRantoul
Chicago
Sector with
Highest
Growth
Rate
(p)
Sector with
Lowest
Growth
Rate (p)
Number of
Jobs *
Growth Rate
%
Growth
91,200
100~300
0.16%~0.32%
+
TTU (2.9%)
CON (-9.7%)
105,100
104,500
-700~200
-0.64%~0.21%
-
PRO (2.2%)
CON (-10.5%)
4,071,000
4,076,100
5,200~8,800
0.13%~0.22%
+
TTU (3.1%)
CON (-12.9%)
178,500
177,200
-1,300~-800
-0.72%~-0.49%
-
TTU (1.8%)
PRO (-7.3%)
52,900
52,200
-700~-500
-1.31%~-0.91%
-
TTU (0.2%)
CON (-3.7%)
Kankakee
44,200
43,800
-400~700
-0.98%~1.48%
-
TTU (2.1%)
CON (-7.9%)
Peoria
184,800
183,400
-1,300~-200
-0.71%~-0.13%
-
EDU (1.9%)
MAN (-6.3%)
Rockford
147,400
144,900
-2,500~-2,000
-1.71%~-1.33%
-
GOV (0.5%)
CON (-7.5%)
Springfield
113,200
113,200
0~900
0%~0.84%
+
FIN (2.1%)
MAN (-3.1%)
MSAs
Davenport-Rock
Island-Moline
Decatur
*Total Non-Farm Jobs
Total Non-farm Employment Forecast
Bloomington (BN)
Number of Jobs
(in thousands)
95000
90000
115000
85000
110000
80000
105000
75000
100000
70000
95000
65000
90000
60000
1990
1992
1994
1996
1998
2000
2002
2004
2006
Total Non-farm Employment Forecast
Champaign-Urbana-Rantoul (CU)
Number of Jobs
(in thousands)
120000
2008
2010
85000
2012
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Year
Number of Jobs
(in thousands)
4400000
Total Non-farm Employment Forecast
Chicago (CHI)
Year
Total Non-farm Employment Forecast
Davenport-Rock-Island-Moline (DRM)
Number of Jobs
(in thousands)
195000
190000
4200000
185000
180000
4000000
175000
3800000
170000
3600000
165000
160000
3400000
155000
3200000
150000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Year
2010
2012
Year
7
Total Non-farm Employment Forecast
Decatur (DE)
Number of Jobs
(in thousands)
62000
Total Non-farm Employment Forecast
Kankakee (KA)
Number of Jobs
(in thousands)
46000
60000
44000
58000
42000
56000
40000
54000
38000
52000
36000
50000
34000
48000
32000
30000
46000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
1990
2012
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Year
Year
Total Non-farm Employment Forecast
Peoria (PE)
Number of Jobs
(in thousands)
200000
Total Non-farm Employment Forecast
Rockford (RO)
Number of Jobs
(in thousands)
170000
165000
190000
160000
180000
155000
170000
150000
145000
160000
140000
150000
135000
140000
130000
130000
125000
120000
120000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
1990
2012
1992
1994
1996
1998
2000
2002
2004
2006
2008
Total Non-farm Employment Forecast
Springfield (SP)
Number of Jobs
(in thousands)
120000
118000
116000
114000
112000
110000
108000
106000
104000
102000
100000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2010
2012
Year
Year
2012
Year
8
Barometer of Job Recovery
Illinois Recovery Scenarios
Growth Rate
To Recover
At the point of
2012- Nov
At the point of
2010-June
In 5 years
100,300 jobs/year
135,100 jobs/year
In 8 years
62,700 jobs/year
84,400 jobs/year
In 10 years
50,200 jobs/year
67,500 jobs/year
In 15 years
33,400 jobs/year
45,000 jobs/year
* The figure 708,100 is the number of jobs needed for the Illinois economy to recover to the previous
employment peak, 2000-Nov. The gap between the previous peak 2000-Nov and the previous lowest
point 2009-Dec is 475,400. Adding 177,100, the number of jobs that needed to bring the shadow and
official unemployment rates together, the total number of jobs that Illinois needs to create is 652,500.
**The figure 32,700 represents the jobs recovered from Dec. 2009 (previous lowest level) through Jun.
2010.
*** The figure 129,400 represents the jobs recovered from Dec. 2009 through Oct 2012.
9
.
I LLINOIS J OB R ECOVERY BY S ECTOR
Illinois job recovery by sector from Dec 2007 – Nov 2012
Job Changes in
Recession
Period*
Job Changes
in Jan 2010Nov 2012
Recovery
Rate
Forecasted
Job Changes
Jan 2010-Nov
2013
Forecasted
Recovery Rate
Construction
-63,900
-23,700
-37.09%
-33,000
-51.64%
Manufacturing
-115,800
45,100
38.95%
50,200
43.35%
Trade, transportation & utilities (TTU)
-96,800
24,000
24.79%
52,900
54.65%
Information
-11,400
-7,400
-64.91%
-11,300
-99.12%
Financial activities
-33,000
2,300
6.97%
8,200
24.85%
Professional & business services
-93,800
84,800
90.41%
114,000
121.54%
Education & health
32,300
42,000
--
66,800
--
Leisure & hospitality
-22,300
24,700
110.76%
37,600
168.61%
Other Services
-5,600
-17,900
-319.64%
-19,400
-346.43%
Government
*Recession period: Dec 2007- Dec 2009
4,800
-28,800
--
-20,100
--


Recovery by
Sector




During the recession period of Dec 2007-Dec 2009, 8 out of 10
Illinois sectors experienced negative job growth. Education &
health and Government are the only 2 sectors that had positive
job growth during the recession.
Since Jan 2010, Illinois employment resumed. Manufacturing,
Trade, transportation & utilities, Financial activities, Professional
& business services and Leisure & hospitality have recovered
38.95%, 24.79%, 6.97%, 90.41%, 110.76%, respectively, from the
job lost during the recession.
However, Construction, Information and Other services
continued to lose jobs leading to negative recovery rates of 37.09%, -64.91% and -319.64% respectively.
The 12-month-ahead job recovery forecasts show that the future
recovery rates will increase for sectors such as Manufacturing,
Trade, transportation & utilities, Financial activities, Professional
& business services and Leisure & hospitality.
For sectors such as Construction, Information and Other
services, they will continue to lose jobs with faster rates.
By Nov 2013, sector Other services is going to shed more than
three times the jobs which were lost during the recession period
of Dec 2007-Dec 2009 while sectors such as Professional &
business services and Leisure & hospitality will recover to the
previous employment peak level.
10
C ATCH UP S CENARIO
Catch-up Scenario* of Previous Peak Job Index in Illinois
Previous Peak
Current
Catch-up
126.39
(Dec-2007)
119.45
(Jun-2000)
115.09
(Nov-2000)
122.50
(Nov 2012)
110.95
(Nov 2012)
108.43
(Nov 2012)
Positive
growth
Positive
growth
Positive
growth
141.73
(Feb 2002)
116.13
(Jan 2009)
114.86
(Nov 2000)
115.02
(Mar 2008)
112.37
(Jan 2000)
126.19
(Nov 2011)
122.21
(Aug 2008)
122.81
(Nov 2000)
110.89
(Aug 2000)
114.97
(Jun 2001)
139.15
(Oct 2012)
106.57
(Oct 2012)
108.78
(Oct 2012)
107.82
(Oct 2012)
98.03
(Oct 2012)
123.39
(Oct 2012)
118.51
(Oct 2012)
109.36
(Oct 2012)
106.54
(Oct 2012)
106.90
(Oct 2012)
Positive
growth
Positive
growth
Positive
growth
Negative
growth
Negative
growth
Positive
growth
Positive
growth
Positive
growth
Positive
growth
Positive
growth
Nation
RMW
IL
Recovery rates
at Sep 2012**
42.83%
37.13%
32.24%
Metro Areas***:
Bloomington
Normal
ChampaignUrbana
Chicago
Davenport- Rock
Island-Moline
Decatur
Kankakee
Peoria
Rockford
Springfield
Metro-East
23.16%
NA
38.04%
8.91%
32.90%
72.16%
66.75%
23.79%
109.82%
10.52%
* Catch-up scenarios are based on average monthly growth rate over the previous 12 months. Nation already passed its previous peak at February 2005.
**Recovery rates are percentage of jobs added since the last official end of the recession.
*** Due to lag of data release schedule there is one month of time lag in the catch-up scenario for metro areas.
NOTE: The US Bureau of Labor Statistics and the Illinois Department of Employment Security changed the way national and state employment data are
coordinated to be more consistent. As a result, there have been some significant changes in estimates for Illinois over the past year.
11
CBAI DECREASED IN OCTOBER
This index is based on national indices of leading indicators and is a barometer for the economy,
tracing the path of growth or contraction through to the current period and then forecasts up to 24
months into the future.

The Chicago Business Activity Index (CBAI) decreased to 71.2 in October from 83.1 in
September. The decline is attributed mainly to the fall in nonmanufacturing employment and retail
activities in the Chicago region.

In September, the national and regional economy shared negative features. The Federal Reserve
Board announced that total industrial (manufacturing) production declined 0.4% (0.9%) in
October after having increased 0.2% (0.1%) in September. Capacity utilization in all industry
(manufacturing) decreased to 77.8% (75.9%) in October from 78.2% (76.7%) in September.

The Chicago Fed reported that the Chicago Fed National Activity Index (CFNAI) decreased to 0.56 in October from 0.00 in September. In the Chicago region, manufacturing output, measured
by the Chicago Fed Midwest Manufacturing Index (CFMMI), decreased 1.2% in October and was
mainly attributed by falls in machinery, resource and steel production. Employment in
nonmanufacturing decreased 0.06% in October while employment in manufacturing and
construction increased 0.39% and 0.68% respectively. Retail sales are estimated to have fallen
0.72% in October.

In the coming months, the national economy is likely to continue to show weak signals about the
economic recovery. The CFNAI-MA3 suggests that growth in national economic activity was
below its historical trend. The Bureau of Labor Statistics reported that total nonfarm payroll
employment increased by 146,000 in November, and the unemployment rate edged down to 7.7%.
Considering recent national economic conditions and movements of projected CBAI, the Chicago
economy is expected to continue its weak economic activities over the next several months.

140
4 month
forecast
above
trend
120
103.4
trend
100
88.5
CBAI (Current: 71.2)
83.1
80
1 month 3 month 1 year
71.2
below
trend
60
Historical (ago)
83.1
88.5
103.4
Forecast (ahead)
70.6
70.1
-
40
20
01/06
01/07
01/08
01/09
01/10
01/11
01/12
01/13
12
METROPOLITAN STATISTICAL
AREA LEAGUE TABLES
MSA LEAGUE TABLES SUMMARY*

Davenport-Rock Island-Moline (3th to 10th) experienced the deepest fall this
month.

Springfield (2nd to 5th), Chicago (5th to 7th) and Metro-East (7th to 9th) also
dropped in terms of rank from last month.

The most remarkable upward move in October was recorded for Bloomington (9th
to 3rd).

Champaign-Urbana-Rantoul (4th to 2nd), Decatur (6th to 4th) and Peoria (10th to
6th) also gained in terms of rank from last month.

In the 12 months growth league table, upward moves were only recorded for
Champaign-Urbana-Rantoul (7th to 1st) and Chicago (4th to 3rd).

Kankakee, Peoria, Bloomington-Normal, Metro-East and Davenport-Rock IslandMoline remained in the same place.

In the 12 months growth league table, Decatur remained in the last place and
Champaign-Urbana-Rantoul climbed up to the first place.

*NOTE: The US Bureau of Labor Statistics and the Illinois Department of Employment Security changed the way national and state employment data
are coordinated to be more consistent. As a result, there have been some significant changes in estimates for Illinois over the past year.
13
MSA League Tables*: Non-farm Employment Growth Rate
Monthly growth:
Rank
Sep 2012
Oct 2012
Rank
Change**
1
Kankakee (1.89%)
Kankakee (2.07%)
1
(+0)
2
Springfield (0.81%)
Champaign-Urbana-Rantoul (1.62%)
2
(+2)
3
Davenport-Rock Island-Moline (0.2%)
Bloomington-Normal (0.99%)
3
(+6)
4
Champaign-Urbana-Rantoul (0.15%)
Decatur (0.75%)
4
(+2)
5
Chicago (0.03%)
Springfield (0.71%)
5
(-3)
6
Decatur (-0.12%)
Peoria (0.7%)
6
(+4)
7
Metro-East (-0.41%)
Chicago (0.45%)
7
(-2)
8
Rockford (-0.43%)
Rockford (0.27%)
8
(+0)
9
Bloomington-Normal (-0.7%)
Metro-East (0.04%)
9
(-2)
10
Peoria (-1.1%)
Davenport-Rock Island-Moline (-0.5%)
10
(-7)
Growth over last 12-months:
Rank
Sep 2012
Oct 2012
Rank
Change**
1
Rockford (1.64%)
Champaign-Urbana-Rantoul (2.36%)
1
(+6)
2
Kankakee (1.44%)
Kankakee (2.2%)
2
(+0)
3
Springfield (1.04%)
Chicago (1.22%)
3
(+1)
4
Chicago (0.99%)
Springfield (1.19%)
4
(-1)
5
Peoria (0.77%)
Peoria (0.94%)
5
(+0)
6
Bloomington-Normal (0.44%)
Bloomington-Normal (0.53%)
6
(+0)
7
Champaign-Urbana-Rantoul (-0.01%)
Rockford (0.17%)
7
(-6)
8
Metro-East (-0.13%)
Metro-East (-0.05%)
8
(+0)
9
Davenport-Rock Island-Moline (-0.39%)
Davenport-Rock Island-Moline (-1.1%)
9
(+0)
10
Decatur (-1.27%)
Decatur (-1.14%)
10
(+0)
*
MSA League Tables are based on revised employment data. For instances of equal growth rate for multiple MSAs ranks
are decided based on change of growth rate from previous month.
14
Unemployment Claims (Initial)
Unemployment Claims
(Initial, IL)
Unemployment Claims
(Initial, US)
40,000
1,200,000
Initial Claims (IL)
Initial Claims (US)
35,000
1,000,000
30,000
800,000
25,000
`
600,000
20,000
400,000
15,000
200,000
Jan/12
Jan/11
Jan/10
Jan/09
Jan/08
Jan/07
Jan/06
Jan/05
Jan/04
Jan/03
Jan/02
Jan/01
5,000
Jan/00
10,000
0
15