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.
SEP 2012
EMPLOYMENT
E MP LOY ME N T DA TA S UM M A RY








Illinois added 9,600 jobs in Aug 2012, compared with a revised 5,100 job losses in Jul 2012.
Compared to Aug 2011, Illinois has added 39,100 jobs. The three-month moving average of
jobs, a more stable measure of labor market, was up by 1,500 jobs per month.
The added 96,000 jobs at a rate of 0.07%, compared with a revised 141,000 job gains in Jul.
The three-month moving average of jobs was up by 94,000 jobs per month.
The Rest of the Midwest (RMW) added 21,700 jobs in Aug at a rate of 0.11% after a revised
24,700 job gains in Jul. 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 26 times so far. The state of Illinois now has a net loss of
287,700 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 116,900 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 Aug 2013, sector Other
services is going to shed nearly fourth time 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 12.5%, 14.2% and
12.4%, compared to official unemployment rates of 9.1%, 7.7% and 8.1%.
Through Jun 2012, the cumulative job growth for Illinois, RMW and the Nation compared
to January 1990 stood at 8.17%, 10.85%, and 22.13%, respectively.
AUG 2012
September
2012
Positive
Total NonFarm
Employment
E MP LOY M E N T C HA RT
Jul 2011–Aug 2012
Last 12 months
Number of
Jobs
Aug 2012
Growth Rate
%
Number of
Jobs
Growth Rate
%
Shadow
U.R. **
Nation
0.07
96,000
1.37
1,808,000
12.4%
RMW*
0.11
21,700
1.19
223,100
14.2%
Illinois
0.17
9,600
0.69
39,100
12.5%
*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 – A U G 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 S E P 2011 – A U G 2012
Sep/11
Oct/11
Nov/11
Dec/11
Jan/12
Feb/12
Mar/12
Apr/12
May/12
Jun/12
Jul/12
0.50%
Nation
RMW
IL
0.40%
0.30%
0.20%
0.10%
0.00%
-0.10%
-0.20%
3
Aug/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
J U L 2012 – A U G 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
-1.00%
-0.80%
-0.60%
-0.40%
-0.20%
0.00%
Nation
S HA D OW
0.20%
0.40%
0.60%
0.80%
RMW
1.00%
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 232,700 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
Aug 2012
Aug 2013 (p)
Number of Jobs
5,698,500
183,500
598,500
1,137,000
99,600
365,600
5,719,800
170,600
610,500
1,142,400
99,500
368,400
15,500~21,300
-12,900
12,000
5,400
-100
2,800
0.27%~0.37%
-7.03%
2.01%
0.47%
-0.10%
0.77%
11,100
16,800
5,000
-3,800
-5,200
1.30%
1.96%
0.94%
-1.59%
-0.63%
854,800
859,300
530,500
238,700
821,200
865,900
876,100
535,500
234,900
816,000
Growth Rate %
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
Year
* The values by sector for the number of jobs added are the lower bound of the forecast.
6
Employment Forecast for MSAs
Jul 2012*
Jul 2013
(p)*
Bloomington-Normal
90,300
Champaign-UrbanaRantoul
Chicago
Sector with
Highest
Growth
Rate
(p)
Sector with
Lowest
Growth
Rate (p)
Number of
Jobs *
Growth Rate
%
Growth
90,400
100~300
0.11%~0.33%
+
PRO (1.3%)
MAN (-6.1%)
103,100
102,600
-500~100
-0.48%~0.10%
-
INF (6.9%)
MAN (-1.2%)
4,059,200
4,081,000
18,300~21,800
0.45%~1.54%
+
CON (3.6%)
EDU (1.9%)
178,800
178,500
-300~700
-0.17%~0.39%
-
GOV (1.3%)
PRO (-6.0%)
51,300
51,100
-200~300
-0.39%~0.58%
-
MAN (1.6%)
PRO (-7.1%)
Kankakee
43,000
43,200
0~200
0%~0.47%
+
MAN (1.1%)
CON (-6.9%)
Peoria
185,400
185,800
100~400
0.05%~0.22%
+
MAN (2.5%)
INF (-4.4%)
Rockford
148,600
149,500
300~900
0.20%~0.61%
+
MAN (3.7%)
CON (-6.5%)
Springfield
111,000
110,500
-500~100
-0.48%~0.09%
-
CON (1.6%)
INF (-5.5%)
MSAs
Davenport-Rock
Island-Moline
Decatur
*Total Non-Farm Jobs
7
8
Barometer of Job Recovery
Illinois Recovery Scenarios
Growth Rate
To Recover
At the point of
2012- Aug
At the point of
2010-June
In 5 years
118,200 jobs/year
135,100 jobs/year
In 8 years
73,900 jobs/year
84,400 jobs/year
In 10 years
59,100 jobs/year
67,500 jobs/year
In 15 years
39,400 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 232,700, 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 708,100.
**The figure 32,700 represents the jobs recovered from Dec. 2009 (previous lowest level) through Jun.
2010.
*** The figure 116,900 represents the jobs recovered from Dec. 2009 through Aug 2012.
9
.
I LLINOIS J OB R ECOVERY BY S ECTOR
Illinois job recovery by sector from Dec 2007 –Aug 2012
Job Changes in
Recession
Period*
Job Changes
in Jan 2010Aug 2012
Recovery
Rate
Forecasted
Job Changes
Jan 2010-Aug
2013
Forecasted
Recovery Rate
Construction
-63,900
-20,300
-31.77%
-33,200
-51.96%
Manufacturing
-115,800
44,900
38.77%
56,900
49.14%
Trade, transportation & utilities (TTU)
-96,800
15,800
16.32%
21,200
21.90%
Information
-11,400
-4,700
-41.23%
-4,800
-42.11%
Financial activities
-33,000
900
2.73%
3,700
11.21%
Professional & business services
-93,800
75,000
79.96%
86,100
91.79%
Education & health
32,300
37,700
--
54,500
--
Leisure & hospitality
-22,300
18,600
83.41%
23,600
105.83%
Other Services
-5,600
-17,600
-314.29%
-21,400
-382.14%
Government
*Recession period: Dec 2007- Dec 2009
4,800
-34,300
--
-39,500
--


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
38.77%, 16.32%, 2.73%, 79.96%, 83.41%, respectively, from the
job lost during the recession.
However, Construction, Information and Other services
continued to lose jobs leading to negative recovery rates of 31.77%, -41.23% and -314.29% 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 Aug 2013, sector Other services is going to shed nearly fourth
time 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 to 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)
122.04
(Aug 2012)
110.72
(Aug 2012)
107.98
(Aug 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)
138.89
(Jul 2012)
104.31
(Jul 2012)
107.95
(Jul 2012)
107.59
(Jul 2012)
97.50
(Jul 2012)
121.11
(Jul 2012)
118.95
(Jul 2012)
110.47
(Jul 2012)
104.64
(Jul 2012)
107.56
(Jul 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 Aug 2012**
37.40%
35.83%
28.77%
Metro Areas***:
Bloomington
Normal
ChampaignUrbana
Chicago
Davenport- Rock
Island-Moline
Decatur
Kankakee
Peoria
Rockford
Springfield
Metro-East
-5.32%
NA
29.22%
19.84%
5.03%
31.97%
70.17%
25.19%
31.12%
11.64%
* 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 JULY
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) was edged up to 89.9 in July from 89.2 in June. The
rise is attributed mainly to the increase in employment of manufacturing in the Chicago region and
an improvement of national economic activities in major sectors such as manufacturing,
nonmanufacturing and retail.

In July, the national and regional economy presented several positive features. The Federal
Reserve Board announced that total industrial (manufacturing) production increased 0.6% (0.5%)
in July after having risen 0.1% (0.5%) in June. Capacity utilization in total industry
(manufacturing) increased to 79.3% (77.8%) in July from 78.9% (77.6%) in the past month. The
nation’s unemployment rate was little changed at 8.3% in July.

The Chicago Fed reported that the Chicago Fed National Activity Index (CFNAI) increased to 0.13 in July from -0.34 in June mainly due to a positive contribution of the production and income
category. In the Chicago region, manufacturing output, measured by the Chicago Fed Midwest
Manufacturing Index (CFMMI), increased 1.8% in July and was mainly attributed by a rise in auto
sector production. Employment in manufacturing increased 0.67% while employment in
nonmanufacturing and construction declined 0.02% and 0.22% respectively. Retail sales are
estimated to have fallen 0.54% in July.

In the coming months, the national economy is likely to continue to show signs of weak recovery.
The Bureau of Labor Statistics reported total nonfarm payroll employment rose by 96,000, and the
unemployment rate edged down to 8.1% in August. The CFNAI-MA3 suggests that growth in
national economic activity was below its historical trend. Considering recent national economic
conditions and movements of projected CBAI, the Chicago economy is expected to continue its
weak economic activity over the next several months.
140
4 month
forecast
above
trend
120
trend
100
100.1
89.9
93.3
CBAI (Current: 89.9)
89.2
80
1 month 3 month 1 year
Historical (ago)
89.2
100.1
93.3
Forecast (ahead)
80.4
76.9
-
below
trend
60
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*

Davenport-Rock Island-Moline (1st to 9th) experienced the deepest fall this month.

Champaign-Urbana-Rantoul (2nd to 8th) and Chicago (3rd to 6th) also dropped in
terms of rank from last month.

The most remarkable upward move in July was recorded for Rockford (9th to 1st).

Peoria (4th to 2nd), Bloomington-Normal (6th to 3rd), Springfield (5th to 4th),
Metro-East (7th to 5th) and Kankakee (8th to 7th) also gained in terms of rank
from last month.

In the 12 months growth league table, upward moves were only recorded for
Springfield (9th to 6th) while downward moves were recorded for Metro-East (6th
to 7th) and Davenport-Rock Island-Moline (7th to 9th).

Peoria, Kankakee, Rockford, Chicago, Bloomington-Normal, Decatur and
Champaign-Urbana-Rantoul remained in the same place.

In the 12 months growth league table, Decatur remained in the last place and
Peoria remained in 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
Jun 2012
Jul 2012
Rank
Change**
1
Davenport-Rock Island-Moline (1.01%)
Rockford (0.61%)
1
(+8)
2
Champaign-Urbana-Rantoul (0.41%)
Peoria (0.13%)
2
(+2)
3
Chicago (0.08%)
Bloomington-Normal (0.09%)
3
(+3)
4
Peoria (-0.1%)
Springfield (0.07%)
4
(+1)
5
Springfield (-0.23%)
Metro-East (0.07%)
5
(+2)
6
Bloomington-Normal (-0.46%)
Chicago (-0.03%)
6
(-3)
7
Metro-East (-0.52%)
Kankakee (-0.11%)
7
(+1)
8
Kankakee (-0.66%)
Champaign-Urbana-Rantoul (-0.28%)
8
(-6)
9
Rockford (-0.87%)
Davenport-Rock Island-Moline (-0.66%)
9
(-8)
10
Decatur (-1.21%)
Decatur (-1.2%)
10
(+0)
Growth over last 12-months:
Rank
Jun 2012
Jul 2012
Rank
Change**
1
Peoria (2.47%)
Peoria (2.22%)
1
(+0)
2
Kankakee (1.92%)
Kankakee (1.77%)
2
(+0)
3
Rockford (1.29%)
Rockford (1.17%)
3
(+0)
4
Chicago (0.87%)
Chicago (0.8%)
4
(+0)
5
Bloomington-Normal (0.18%)
Bloomington-Normal (0.4%)
5
(+0)
6
Metro-East (-0.46%)
Springfield (-0.1%)
6
(+3)
7
Davenport-Rock Island-Moline (-0.52%)
Metro-East (-0.18%)
7
(-1)
8
Champaign-Urbana-Rantoul (-0.55%)
Champaign-Urbana-Rantoul (-0.82%)
8
(+0)
9
Springfield (-0.93%)
Davenport-Rock Island-Moline (-0.96%)
9
(-2)
10
Decatur (-2.36%)
Decatur (-3.54%)
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