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.
AUG 2012
EMPLOYMENT
E MP LOY ME N T DA TA S UM M A RY








Illinois shed 5,100 jobs in Jul 2012, compared with a revised 0 job changes in Jun 2012.
Compared to Jul 2011, Illinois has added 30,600 jobs. The three-month moving average of
jobs, a more stable measure of labor market, was down by 2,300 jobs per month.
The Nation added 141,000 jobs at a rate of 0.11%, compared with a revised 45,000 job gains
in Jun. The three-month moving average of jobs was up by 91,000 jobs per month.
The Rest of the Midwest (RMW) added 24,700 jobs in Jul at a rate of 0.13% after a revised
4,900 job losses in Jun. The three-month moving average was up by 7,100 jobs per month.
Since the beginning of the recession in Dec 2007, Illinois has posted negative job changes
29 times and positive job gains 26 times so far. The state of Illinois now has a net loss of
297,300 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, Professional & business services and Leisure &
hospitality but decrease for sector Trade, transportation & utilities. By July2013, sector
Other services is going to shed more than fourth time the jobs which were lost during the
recession period of Dec 2007-Dec 2009.
The shadow unemployment rates for Illinois, RMW and the Nation were 12.1%, 13.8% and
12.3%, compared to official unemployment rates of 8.9%, 7.6% and 8.3%.
Through Jun 2012, the cumulative job growth for Illinois, RMW and the Nation compared
to January 1990 stood at 7.98%, 10.72%, and 22.04%, respectively.
JUL 2012
Total NonFarm
Employment
August
2012
Negative
E MP LOY ME N T C HA RT
Jun 2011– Jul 2012
Last 12 months
Number of
Jobs
Jul 2012
Growth Rate
%
Number of
Jobs
Growth Rate
%
Shadow
U.R. **
Nation
0.11
141,000
1.37
1,797,000
12.3%
RMW*
0.13
24,700
1.03
192,500
13.8%
Illinois
-0.09
-5,100
0.54
30,600
12.1%
*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 – J U L 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 A U G 2011 – J U L 2012
Aug/11
Sep/11
Oct/11
Nov/11
Dec/11
Jan/12
Feb/12
Mar/12
Apr/12
May/12
Jun/12
0.50%
Nation
RMW
IL
0.40%
0.30%
0.20%
0.10%
0.00%
-0.10%
-0.20%
3
Jul/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 N 2012 – J U L 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%
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 213,900 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
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
Jul 2012
Jul 2013 (p)
5,686,900
185,100
598,200
1,136,200
100,500
363,700
855,800
853,500
527,000
236,700
820,400
5,673,700
168,600
604,100
1,126,200
100,600
363,100
868,100
867,700
530,100
230,700
814,500
Number of Jobs
-13,200~17,600
-16,500
5,900
-10,000
100
-600
12,300
14,200
3,100
-6,000
-5,900
Growth Rate
%
-0.23%~0.31%
-8.91%
0.99%
-0.88%
0.10%
-0.16%
1.44%
1.66%
0.59%
-2.53%
-0.72%
* The values by sector for the number of jobs added are the lower bound of the forecast.
6
Employment Forecast for MSAs
Jun 2012*
Jun 2013
(p)*
Bloomington-Normal
90,600
Champaign-UrbanaRantoul
Chicago
Sector with
Highest
Growth
Rate
(p)
Sector with
Lowest
Growth
Rate (p)
Number of
Jobs *
Growth Rate
%
Growth
90,200
-400~600
0.11%~0.50%
-
PRO (1.8%)
MAN (-10.1%)
102,800
102,700
-100~100
-0.20%~0.80%
-
INF (10.9%)
MAN (-1.7%)
4,056,000
4,082,000
18,300~26,000
0.30%~1.50%
+
CON (-4.9%)
EDU (1.9%)
177,700
178,300
400~700
-1.20%~0.20%
+
GOV (2.3%)
PRO (-6.0%)
52,600
52,200
-400~300
-0.40%~0.90%
-
MAN (1.8%)
PRO (-7.1%)
Kankakee
43,300
43,300
0~400
0%~0.90%
+
MAN (2.9%)
CON (-6.9%)
Peoria
185,500
186,800
1,300~1,400
-0.20%~1.00%
+
MAN (5.5%)
INF (-4.4%)
Rockford
149,000
150,500
300~1,500
1.30%~1.90%
+
MAN (4.7%)
CON (-8.5%)
Springfield
111,000
110,800
-200~100
-0.9%~0.90%
-
EDU (2.5%)
INF (-11.5%)
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- July
At the point of
2010-June
In 5 years
116,400 jobs/year
131,300 jobs/year
In 8 years
72,700 jobs/year
82,100 jobs/year
In 10 years
58,200 jobs/year
65,700 jobs/year
In 15 years
38,800 jobs/year
43,800 jobs/year
* * The figure 689,300 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 213,900, 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 689,300.
**The figure 32,700 represents the jobs recovered from Dec. 2009 (previous lowest level) through Jun.
2010.
*** The figure 107,300 represents the jobs recovered from Dec. 2009 through July 2012.
9
.
I LLINOIS J OB R ECOVERY BY S ECTOR
Illinois job recovery by sector from Dec 2007 –Jul 2012
Job Changes in
Recession
Period*
Job Changes
in Jan 2010Jul 2012
Recovery
Rate
Forecasted
Job Changes
Jan 2010-Jul
2013
Forecasted
Recovery Rate
Construction
-63,900
-18,800
-29.42%
-35,200
-55.09%
Manufacturing
-115,800
44,200
38.17%
50,500
43.61%
Trade, transportation & utilities (TTU)
-96,800
16,800
17.36%
5,000
5.17%
Information
-11,400
-4,000
-35.09%
-3,700
-32.46%
Financial activities
-33,000
-200
-0.61%
-1,600
-4.85%
Professional & business services
-93,800
75,200
80.17%
88,300
94.14%
Education & health
32,300
32,400
--
46,100
--
Leisure & hospitality
-22,300
15,100
67.71%
18,200
81.61%
Other Services
-5,600
-19,400
-346.43%
-25,600
-457.14%
Government
*Recession period: Dec 2007- Dec 2009
4,800
-34,900
--
-41,000
--


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, Professional & business services
and Leisure & hospitality have recovered 38.17%, 17.36%,
80.17%, 67.71%, respectively, from the job lost during the
recession.
However, Construction, Information, Financial activities and
Other services continued to lose jobs leading to negative recovery
rates of -29.42%, -35.09%, -0.61% and -346.43% respectively.
The 12-month-ahead job recovery forecasts show that the future
recovery rates will increase for sectors such as Manufacturing,
Professional & business services and Leisure & hospitality but
decrease for sector Trade, transportation & utilities.
For sectors such as Construction, Financial activities and Other
services, they will continue to lose jobs with faster rates.
By July2013, sector Other services is going to shed more than
fourth time the jobs which were lost during the recession period
of Dec 2007-Dec 2009 while sector Leisure & hospitality will
recover about 82% 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)
121.87
(Jul 2012)
110.60
(Jul 2012)
108.08
(Jul 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
(Jun 2012)
104.31
(Jun 2012)
107.95
(Jun 2012)
107.59
(Jun 2012)
97.50
(Jun 2012)
121.11
(Jun 2012)
118.95
(Jun 2012)
110.47
(Jun 2012)
104.64
(Jun 2012)
107.56
(Jun 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 Jul 2012**
36.11%
34.31%
26.41%
Metro Areas***:
Bloomington
Normal
ChampaignUrbana
Chicago
Davenport- Rock
Island-Moline
Decatur
Kankakee
Peoria
Rockford
Springfield
Metro-East
-2.11%
NA
29.28%
20.43%
13.03%
26.26%
70.32%
26.81%
42.41%
11.80%
* 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 JUNE
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 98.6 in June, up from 97.9 in May. The rise is
attributed mainly to the increase in employment of manufacturing, non-manufacturing and
construction, and to the improvement of retail activity in the Chicago region.

In June, the national and regional economy presented several positive features. The Federal
Reserve Board announced that total industrial (manufacturing) production increased 0.4% (0.7%)
in June after having declined 0.2% (0.7%) in May. Capacity utilization in total industry
(manufacturing) increased to 78.9% (77.7%) from 78.7% (77.3%) in the past month. The nation’s
unemployment rate was little changed at 8.2% in June.

The Chicago Fed reported that the Chicago Fed National Activity Index (CFNAI) increased to 0.15 in June from -0.48 in May 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 1.1% and was mainly attributed by a rise in machinery
and auto sector production. Employment in manufacturing and nonmanufacturing increased 0.44%
and 0.08% respectively. Employment in construction also increased 0.78% and retail sales are
estimated to have risen 1.01% in June.

In the coming months, the national economy is likely to continue to show continuing signs of a
weak recovery. The Bureau of Labor Statistics reported total nonfarm payroll employment rose by
163,000, and the unemployment rate was little unchanged at 8.3% in July. 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
104.0
100
98.6
96.8
trend
97.9
CBAI (Current: 98.6)
80
1 month 3 month 1 year
below
trend
60
Historical (ago)
97.9
104.0
96.8
Forecast (ahead)
95.4
88.0
-
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*

Kankakee (4th to 10th) and Rockford (2nd to 8th) experienced the deepest fall this
month.

Champaign-Urbana-Rantoul (3rd to 5th) and Bloomington-Normal (1st to 6th) also
dropped in terms of rank from last month.

The most remarkable upward move in June was recorded for Chicago (8th to 2nd).

Davenport-Rock Island-Moline (6th to 1st), Springfield (7th to 3rd), Metro-East
(9th to 7th), Decatur (10th to 9th) and Peoria (5nd to 4th) also gained in terms of
rank from last month.

In the 12 months growth league table, upward moves were recorded for Peoria
(2nd to 1st), Rockford (3rd to 2nd), Bloomington-Normal (6th to 5th), DavenportRock Island-Moline (10th to 7th) while downward moves were recorded for
Kankakee (1st to 3rd), Metro-East (5th to 6th) and Decatur (7th to 10th).

Chicago, Springfield and Champaign-Urbana-Rantoul remained in the same place.

In the 12 months growth league table, Decatur dropped to the last place while
Peoria 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
May 2012
Jun 2012
Rank
Change**
1
Bloomington-Normal (0.8%)
Davenport-Rock Island-Moline (1.06%)
1
(+5)
2
Rockford (0.42%)
Chicago (0.1%)
2
(+6)
3
Champaign-Urbana-Rantoul (0.39%)
Springfield (0.02%)
3
(+4)
4
Kankakee (0.15%)
Peoria (-0.04%)
4
(+1)
5
Peoria (0.11%)
Champaign-Urbana-Rantoul (-0.12%)
5
(-2)
6
Davenport-Rock Island-Moline (0.08%)
Bloomington-Normal (-0.4%)
6
(-5)
7
Springfield (-0.13%)
Metro-East (-0.52%)
7
(+2)
8
Chicago (-0.2%)
Rockford (-0.56%)
8
(-6)
9
Metro-East (-0.25%)
Decatur (-0.85%)
9
(+1)
10
Decatur (-0.58%)
Kankakee (-1.07%)
10
(-6)
Growth over last 12-months:
Rank
May 2012
Jun 2012
Rank
Change**
1
Kankakee (2.89%)
Peoria (2.53%)
1
(+1)
2
Peoria (2.74%)
Rockford (1.69%)
2
(+1)
3
Rockford (2.38%)
Kankakee (1.68%)
3
(-2)
4
Chicago (0.84%)
Chicago (0.9%)
4
(+0)
5
Metro-East (0.19%)
Bloomington-Normal (0.3%)
5
(+1)
6
Bloomington-Normal (0.11%)
Metro-East (-0.45%)
6
(-1)
7
Decatur (-0.57%)
Davenport-Rock Island-Moline (-0.46%)
7
(+3)
8
Springfield (-0.65%)
Springfield (-0.5%)
8
(+0)
9
Champaign-Urbana-Rantoul (-1.07%)
Champaign-Urbana-Rantoul (-1.23%)
9
(+0)
10
Davenport-Rock Island-Moline (-1.62%)
Decatur (-1.63%)
10
(-3)
*
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