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.
OCT 2012
EMPLOYMENT
E MP LOY ME N T DA TA S UM M A RY








Illinois added 13,800 jobs in Sep 2012, compared with a revised 8,800 job changes in Aug
2012. Compared to Sep 2011, Illinois has added 52,500 jobs. The three-month moving
average of jobs, a more stable measure of labor market, was up by 5,800 jobs per month.
The Nation added 114,000 jobs at a rate of 0.09%, compared with a revised 141,000 job
gains in Aug. The three-month moving average of jobs was up by 94,000 jobs per month.
The Rest of the Midwest (RMW) shed 28,700 jobs in Sep at a rate of 0.15% after a revised
24,700 job gains in Aug. The three-month moving average was up by 13,800 jobs per month.
Since the beginning of the recession in Dec 2007, Illinois has posted negative job changes
30 times and positive job gains 27 times so far. The state of Illinois now has a net loss of
274,700 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 129,900 new jobs.
The 12-month-ahead job recovery forecasts show that the future recovery rates will increase
for sectors such as Trade, transportation & utilities, Financial activities, Professional &
business services and Leisure & hospitality. By Sep 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 be likely recover to the previous employment peak level.
The shadow unemployment rates for Illinois, RMW and the Nation were 11.9%, 14.1% and
12.0%, compared to official unemployment rates of 8.8%, 7.6% and 7.9%.
Through Sep 2012, the cumulative job growth for Illinois, RMW and the Nation compared
to January 1990 stood at 8.34%, 10.84%, and 22.37%, respectively.
SEP 2012
October
2012
Positive
Total NonFarm
Employment
E MP LOY M E N T C HA RT
Aug 2011–Sep 2012
Last 12 months
Number of
Jobs
Sep 2012
Growth Rate
%
Number of
Jobs
Growth Rate
%
Shadow
U.R. **
Nation
0.09
114,000
1.37
1,806,000
12.0%
RMW*
-0.15
-28,700
1.13
210,800
14.1%
Illinois
0.24
13,800
0.93
52,500
11.9%
*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
participation rates matched the average for the 15-year period from 1990 to 2004.
2
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 – S E P 2012
130.00
125.00
120.00
115.00
110.00
105.00
100.00
National
RMW
IL
95.00
1990
1991
1992
LAST
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
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 O C T 2011 – S E P 2012
Oct/11
Nov/11
Dec/11
Jan/12
Feb/12
Mar/12
Apr/12
May/12
Jun/12
Jul/12
Aug/12
0.50%
Nation
RMW
IL
0.40%
0.30%
0.20%
0.10%
0.00%
-0.10%
-0.20%
3
Sep/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
A U G 2012 – S E P 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
-2.50%
-2.00%
-1.50%
-1.00%
-0.50%
0.00%
Nation
S HA D OW
0.50%
1.00%
1.50%
RMW
2.00%
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 211,600 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
Number of Jobs
(in thousands)
6200
Sep 2012
Sep 2013 (p)
Number of Jobs
5,711,500
184,200
594,800
1,134,600
97,400
366,900
5,777,600
174,900
580,600
1,145,500
93,300
375,000
32,500~66,100
-9,300
-14,200
10,900
-4,100
8,100
862,900
860,000
533,700
239,100
828,200
893,500
888,200
548,500
237,900
840,100
Growth Rate %
0.57%~1.16%
-5.05%
-2.39%
0.96%
-4.21%
2.21%
30,600
28,200
14,800
-1,200
11,900
3.55%
3.28%
2.77%
-0.50%
1.44%
Total Non-farm Employment Forecast
6000
5800
5600
5400
5200
5000
4800
4600
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Year
* The values by sector for the number of jobs added are the lower bound of the forecast.
6
Employment Forecast for MSAs
Aug 2012*
Aug 2013
(p)*
Bloomington-Normal
90,500
Champaign-UrbanaRantoul
Chicago
Sector with
Highest
Growth
Rate
(p)
Sector with
Lowest
Growth
Rate (p)
Number of
Jobs *
Growth Rate
%
Growth
90700
100~200
0.15%~0.22%
+
CON (2.6%)
INF (-8.0%)
103,300
104,300
1,000~1,100
0.95%~1.09%
+
GOV (4.2%)
CON (-5.6%)
4,068,000
4,080,100
12,000~15,400
0.30%~0.38%
+
TTU (3.6%)
CON (-12.6%)
179,000
177,700
-1,400~-700
-0.78%~-0.38%
-
TTU (2.6%)
CON (-7.0%)
52,600
52,200
-400~-100
-0.68%~-0.12%
-
PRO (5.5%)
CON (-6.6%)
Kankakee
43,500
44,300
700~1,100
1.69%~2.57%
+
TTU (6.1%)
FIN (-0.9%)
Peoria
185,500
183,300
100~400
-1.00%~-1.22%
-
OTH (1.8%)
MAN (-6.9%)
Rockford
147,700
145,500
-2,100~-1,500
-1.45%~-1.01%
-
GOV (2.3%)
CON (-7.5%)
Springfield
111,500
113,500
1,900~2,300
1.74%~2.02%
+
INF (9.5%)
MAN (-3.1%)
MSAs
Davenport-Rock
Island-Moline
Decatur
*Total Non-Farm Jobs
Number of Jobs
(in thousands)
95000
Total Non-farm Employment Forecast
Bloomington (BN)
Number of Jobs
(in thousands)
120000
90000
115000
85000
110000
80000
105000
75000
100000
70000
95000
65000
90000
60000
Total Non-farm Employment Forecast
Champaign-Urbana-Rantoul (CU)
85000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Year
Number of Jobs
(in thousands)
4400000
Total Non-farm Employment Forecast
Chicago (CHI)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Year
Number of Jobs
(in thousands)
195000
Total Non-farm Employment Forecast
Davenport-Rock-Island-Moline (DRM)
190000
4200000
185000
180000
4000000
175000
3800000
170000
165000
3600000
160000
3400000
155000
150000
3200000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Year
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 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
160000
145000
140000
150000
135000
140000
130000
130000
125000
120000
120000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Year
118000
116000
114000
112000
110000
108000
106000
104000
102000
100000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Year
Total Non-farm Employment Forecast
Springfield (SP)
Number of Jobs
(in thousands)
120000
2010
2012
Year
8
Barometer of Job Recovery
Illinois Recovery Scenarios
Growth Rate
To Recover
At the point of
2012- Sep
At the point of
2010-June
In 5 years
112,200 jobs/year
135,100 jobs/year
In 8 years
70,100 jobs/year
84,400 jobs/year
In 10 years
56,100 jobs/year
67,500 jobs/year
In 15 years
37,400 jobs/year
45,000 jobs/year
* The figure 687,000 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 211,600, 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 687,000.
**The figure 32,700 represents the jobs recovered from Dec. 2009 (previous lowest level) through Jun.
2010.
*** The figure 126,200 represents the jobs recovered from Dec. 2009 through Sep 2012.
.
9
I LLINOIS J OB R ECOVERY BY S ECTOR
Illinois job recovery by sector from Dec 2007 – Sep 2012
Job Changes in
Recession
Period*
Job Changes
in Jan 2010Sep 2012
Recovery
Rate
Forecasted
Job Changes
Jan 2010-Sep
2013
Forecasted
Recovery Rate
Construction
-63,900
-19,700
-30.83%
-28,900
-45.23%
Manufacturing
-115,800
42,400
36.61%
27,000
23.32%
Trade, transportation & utilities (TTU)
-96,800
12,200
12.60%
24,300
25.10%
Information
-11,400
-6,900
-60.53%
-11,000
-96.49%
Financial activities
-33,000
2,000
6.06%
10,300
31.21%
Professional & business services
-93,800
79,400
84.65%
113,700
121.22%
Education & health
32,300
39,500
--
66,600
--
Leisure & hospitality
-22,300
21,600
96.86%
36,600
164.13%
Other Services
-5,600
-17,800
-317.86%
-18,400
-328.57%
Government
*Recession period: Dec 2007- Dec 2009
4,800
-27,300
--
-15,400
--


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
36.61%, 12.60%, 6.06%, 84.65%, 96.86%, respectively, from the
job lost during the recession.
However, Construction, Information and Other services
continued to lose jobs leading to negative recovery rates of 30.83%, -60.53% and -317.86% respectively.
The 12-month-ahead job recovery forecasts show that the future
recovery rates will increase for sectors such as 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 Sep 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 be likely 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)
122.37
(Sep 2012)
110.84
(Sep 2012)
108.34
(Sep 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)
137.78
(Aug 2012)
104.86
(Aug 2012)
108.29
(Aug 2012)
108.36
(Aug 2012)
97.30
(Aug 2012)
120.89
(Aug 2012)
117.68
(Aug 2012)
109.07
(Aug 2012)
105.79
(Aug 2012)
106.85
(Aug 2012)
Positive
growth
Negative
growth
Positive
growth
Negative
growth
Negative
growth
Positive
growth
Positive
growth
Positive
growth
Negative
growth
Negative
growth
Nation
RMW
IL
Recovery rates
at Sep 2012**
39.22%
37.22%
28.57%
Metro Areas***:
Bloomington
Normal
ChampaignUrbana
Chicago
Davenport- Rock
Island-Moline
Decatur
Kankakee
Peoria
Rockford
Springfield
Metro-East
11.17%
NA
31.82%
13.08%
22.42%
13.24%
61.29%
24.95%
50.63%
17.02%
* 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 of the total at the official start 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 INCREASED IN AUGUST
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) declined to 80.1 in August from 87.3 in the previous
month. The fall is attributed mainly to the decrease in employment of manufacturing and
construction in the Chicago region and weak national economic activities in major sectors such as
manufacturing.

In August, the national and regional economy presented several negative features. The Federal
Reserve Board announced that the growth rate of total industrial (manufacturing) production
recorded -1.2% (-0.7%) in August after having shown +0.5% (+0.4%) in July. Capacity utilization
in total industry (manufacturing) decreased to 78.2% (77.0%) in August from 79.2% (77.7%) in
August.

The Chicago Fed reported that the Chicago Fed National Activity Index (CFNAI) decreased to 0.87 in August from -0.12 in July due to a negative contribution of all four broad categories; 1.
Production and income, 2. Employment, 3. Consumption and housing, and 4. Sales, orders, and
inventories. In the Chicago region, manufacturing output, measured by the Chicago Fed Midwest
Manufacturing Index (CFMMI), decreased 1.2% in August and was mainly attributed by a fall in
auto and steel production. Employment in manufacturing and construction decreased 0.55% and
0.54% while employment in nonmanufacturing rose 0.16% and retail sales are estimated to have
risen 0.65% in August.

In the coming months, the national economy is likely to continue to show mixed 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 total nonfarm payroll
employment rose by 114,000, and the unemployment rate fell to 7.8% in September. 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
100
98.3
94.5
CBAI (Current: 80.1)
trend
87.3
80
80.1
1 month 3 month 1 year
below
trend
60
Historical (ago)
87.3
98.3
94.5
Forecast (ahead)
81.5
77.4
-
40
20
01/06
01/07
01/08
01/09
01/10
01/11
01/12
12
METROPOLITAN STATISTICAL
AREA LEAGUE TABLES
MSA LEAGUE TABLES SUMMARY*

Rockford (1st to 10th) experienced the deepest fall this month.

Springfield (3rd to 4th), Metro-East (4th to 6th) and Champaign-Urbana-Rantoul
(2nd to 8th) also dropped in terms of rank from last month.

The most remarkable upward move in August was recorded for Decatur (10th to
1st).

Peoria (7th to 2nd), Bloomington-Normal (6th to 3rd) and Davenport-Rock IslandMoline (8th to 7th) also gained in terms of rank from last month.

In the 12 months growth league table, upward moves were recorded for Rockford
(3rd to 2nd), Bloomington-Normal (5th to 3rd) and Davenport-Rock IslandMoline (9th to 6th) while downward moves were recorded for Kankakee (2nd to
5th), Champaign-Urbana-Rantoul (6th to 8th) and Metro-East (8th to 9th).

Peoria, Chicago, Springfield and Decatur remained in the same place.

In the 12 months growth league table, Decatur remained in the last place and
Peoria remained in 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
Jul 2012
Aug 2012
Rank
Change**
1
Rockford (0.44%)
Decatur (2.79%)
1
(+9)
2
Champaign-Urbana-Rantoul (0.24%)
Peoria (0.51%)
2
(+5)
3
Springfield (0.2%)
Bloomington-Normal (0.45%)
3
(+3)
4
Metro-East (0.09%)
Springfield (0.34%)
4
(-1)
5
Chicago (0%)
Chicago (0.19%)
5
(+0)
6
Bloomington-Normal (-0.07%)
Metro-East (0.18%)
6
(-2)
7
Peoria (-0.3%)
Davenport-Rock Island-Moline (0.16%)
7
(+1)
8
Davenport-Rock Island-Moline (-0.67%)
Champaign-Urbana-Rantoul (-0.33%)
8
(-6)
9
Kankakee (-0.81%)
Kankakee (-0.44%)
9
(+0)
10
Decatur (-1.27%)
Rockford (-0.46%)
10
(-9)
Growth over last 12-months:
Rank
Jul 2012
Aug 2012
Rank
Change**
1
Peoria (1.65%)
Peoria (2.29%)
1
(+0)
2
Kankakee (1.04%)
Rockford (1.99%)
2
(+1)
3
Rockford (0.89%)
Bloomington-Normal (1.85%)
3
(+2)
4
Chicago (0.77%)
Chicago (1.01%)
4
(+0)
5
Bloomington-Normal (0.16%)
Kankakee (0.32%)
5
(-3)
6
Champaign-Urbana-Rantoul (-0.16%)
Davenport-Rock Island-Moline (0%)
6
(+3)
7
Springfield (-0.19%)
Springfield (-0.01%)
7
(+0)
8
Metro-East (-0.2%)
Champaign-Urbana-Rantoul (-0.06%)
8
(-2)
9
Davenport-Rock Island-Moline (-1.02%)
Metro-East (-0.12%)
9
(-1)
10
Decatur (-3.75%)
Decatur (-0.49%)
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