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.
JUL 2012
EMPLOYMENT
E MP LOY ME N T DA TA S UM M A RY








Illinois added 800 jobs in Jun 2012, compared with a revised 1,900 job losses in May 2012.
Compared to Jun 2011, Illinois has added 25,500 jobs. The three-month moving average of
jobs, a more stable measure of labor market, was down by 1,300 jobs per month.
The Nation added 77,000 jobs at a rate of 0.06%, compared with a revised 68,000 job gains
in Apr. The three-month moving average of jobs was up by 96,000 jobs per month.
The Rest of the Midwest (RMW) shed 7,800 jobs in Jun at a rate of -0.04% after a revised
1,600 job gains in May. The three-month moving average was up by 3,800 jobs per month.
Since the beginning of the recession in Dec 2007, Illinois has posted negative job changes
28 times and positive job gains 26 times so far. The state of Illinois now has a net loss of
291,400 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 113,200 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. By June 2013, sector Other services is going to shed more than third time the
jobs which were lost during the recession period of Dec 2007-Dec 2009 while sector
Leisure & hospitality will completely recover to the previous employment peak level.
The shadow unemployment rates for Illinois, RMW and the Nation were 11.7%, 13.3% and
12.1%, compared to official unemployment rates of 8.7%, 7.4% and 8.2%
Through Jun 2012, the cumulative job growth for Illinois, RMW and the Nation compared
to January 1990 stood at 8.10%, 10.56%, and 21.93%, respectively.
JUN 2012
July
2012
Positive
Total NonFarm
Employment
E MP LOY M E N T C HA RT
May 2011– Jun 2012
Last 12 months
Number of
Jobs
Jun 2012
Growth Rate
%
Number of
Jobs
Growth Rate
%
Shadow
U.R. **
Nation
0.06
80,000
1.35
1,777,000
12.1%
RMW*
-0.04
-7,800
1.06
199,100
13.3%
Illinois
0.01
800
0.45
25,500
11.7%
*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 N 2012
130.00
125.00
120.00
115.00
110.00
105.00
100.00
National
RMW
IL
95.00
1990
1991
1992
LAST
Jul/11
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
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 J U L 2011 – J U N 2012
Aug/11
Sep/11
Oct/11
Nov/11
Dec/11
Jan/12
Feb/12
Mar/12
Apr/12
May/12
0.60%
0.50%
2012
Nation
RMW
IL
0.40%
0.30%
0.20%
0.10%
0.00%
-0.10%
-0.20%
-0.30%
3
Jun/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
M AY 2012 – J U N 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
-1.50%
-1.00%
-0.50%
Nation
S HA D OW
0.00%
0.50%
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 203,500 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
Jun 2012
Jun 2013 (p)
5,694,800
185,100
596,500
1,132,200
99,600
363,300
854,400
853,400
531,500
241,000
828,000
5,712,500
171,500
608,200
1,117,600
98,400
363,800
872,100
871,000
540,100
238,000
832,000
Number of
Jobs
17,700~20,100
-13,600
11,700
-14,600
-1,200
500
17,700
17,600
8,600
-3,000
4,000
Growth Rate %
0.31%~0.35%
-7.35%
1.96%
-1.29%
-1.20%
0.14%
2.07%
2.06%
1.62%
-1.24%
0.48%
* The values by sector for the number of jobs added are the lower bound of the forecast.
6
Employment Forecast for MSAs
MSAs
May
2012*
May 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
90,100
-400~500
-0.40%~0.60%
-
PRO (1.8%)
MAN (-10.1%)
102,600
102,500
-100~200
-0.10%~0.10%
-
INF (10.9%)
MAN (-1.7%)
4,056,000
4,080,000
18,300~24,000
0.50%~0.60%
+
CON (-4.9%)
EDU (1.9%)
177,700
178,000
300~400
0.20%~0.40%
+
GOV (2.3%)
PRO (-6.0%)
52,700
52,300
-400~400
-0.80%~0.60%
-
MAN (1.8%)
PRO (-7.1%)
Kankakee
43,100
43,100
0~200
0%~0.90%
+
MAN (2.9%)
CON (-6.9%)
Peoria
185,500
186,800
-400~1,900
0.70%~0.80%
+
MAN (5.5%)
INF (-4.4%)
Rockford
149,000
150,500
2,000~2,900
0.20%~1.00%
+
MAN (4.7%)
CON (-8.5%)
Springfield
111,000
110,800
-200~100
-0.30%~0.10%
-
EDU (2.5%)
INF (-11.5%)
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- June
At the point of
2010-June
In 5 years
113,100 jobs/year
129,200 jobs/year
In 8 years
70,700 jobs/year
80,800 jobs/year
In 10 years
56,600 jobs/year
64,600 jobs/year
In 15 years
37,700 jobs/year
43,100 jobs/year
* * The figure 678,900 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 203,500, 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 678,900.
**The figure 32,700 represents the jobs recovered from Dec. 2009 (previous lowest level) through Jun.
2010.
*** The figure 113,200 represents the jobs recovered from Dec. 2009 through Jun 2012.
9
.
I LLINOIS J OB R ECOVERY BY S ECTOR
Illinois job recovery by sector from Dec 2007 –Jun 2012
Job Changes in
Recession
Period*
Job Changes
in Jan 2010Jun 2012
Recovery
Rate
Forecasted
Job Changes
Jan 2010-Jun
2013
Forecasted
Recovery Rate
Construction
-63,900
-18,700
-29.26%
-32,300
-50.55%
Manufacturing
-115,800
42,900
37.05%
54,600
47.15%
Trade, transportation & utilities (TTU)
-96,800
11,000
11.36%
-3,600
-3.72%
Information
-11,400
-4,700
-41.23%
-5,900
-51.75%
Financial activities
-33,000
-1,400
-4.24%
-900
-2.73%
Professional & business services
-93,800
74,600
79.53%
92,300
98.40%
Education & health
32,300
31,800
--
49,400
--
Leisure & hospitality
-22,300
19,600
87.89%
28,200
126.46%
Other Services
-5,600
-15,300
-273.21%
-18,300
-326.79%
Government
*Recession period: Dec 2007- Dec 2009
4,800
-27,500
--
-23,500
--


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, Professional & business services
and Leisure & hospitality have recovered 37.05%, 11.36%,
79.53%, 87.89%, 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 -29.26%, -41.23%, -4.24% and -273.21% 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.
However, sector like Trade, transportation & utilities may lose
jobs again rather than recovery.
For sectors such as Construction, Information and Other
services, they will continue to lose jobs with faster rates.
By June 2013, sector Other services is going to shed more than
third time the jobs which were lost during the recession period of
Dec 2007-Dec 2009 while sector Leisure & hospitality will
completely 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)
121.93
(Jun 2012)
110.56
(Jun 2012)
108.10
(Jun 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)
138.34
(May 2012)
104.19
(May 2012)
108.06
(May 2012)
108.74
(May 2012)
96.67
(May 2012)
119.81
(May 2012)
118.90
(May 2012)
109.84
(May 2012)
104.67
(May 2012)
107.01
(May 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 Jun 2012**
34.56%
32.37%
27.86%
Metro Areas***:
Bloomington
Normal
ChampaignUrbana
Chicago
Davenport- Rock
Island-Moline
Decatur
Kankakee
Peoria
Rockford
Springfield
Metro-East
14.51%
NA
27.97%
5.91%
24.80%
42.56%
70.76%
31.00%
41.47%
21.03%
* 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 MAY
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 102.4 in May, up from 100.2 in April. The rise
is attributed mainly to the increase in manufacturing employment and retail activity in the Chicago
region.

In May, the national and regional economy presented mixed features. The Federal Reserve Board
announced that total industrial production edged down 0.1% in May after having gained 1.0% in
April. Capacity utilization in total industry decreased to 79.0% from 79.2% in the past month. The
nation’s unemployment rate was little changed at 8.2% in May.

The Chicago Fed reported that the Chicago Fed National Activity Index (CFNAI) decreased to 0.45 in May from +0.08 in April mainly due to a negative contribution of the production and
consumption category. In the Chicago region, manufacturing output, measured by the Chicago Fed
Midwest Manufacturing Index (CFMMI), decreased 1.0% and was mainly attributed by a decline
in auto sector production. Employment in nonmanufacturing and construction fell 0.12% and 0.41
respectively. Meanwhile, employment in manufacturing increased 0.29% and retail sales are
estimated to have risen 2.21% in May.

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 edged up in June
(+80,000), and the unemployment rate was unchanged at 8.2%. 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
113.4
102.4
100
100.2
trend
97.2
CBAI (Current: 102.4)
80
1 month 3 month 1 year
below
trend
60
Historical (ago)
100.2
113.4
97.2
Forecast (ahead)
88.9
80.3
-
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*

Metro-East (2nd to 9th) experienced the deepest fall this month.

Peoria (1st to 4th), Chicago (5th to 7th), Springfield (7th to 8th) and Decatur (9th
to 10th) also dropped in terms of rank from last month.

The most remarkable upward move in May was recorded for Bloomington-Normal
(6th to 1st).

Rockford (3rd to 2nd), Champaign-Urbana (4th to 3rd), Kankakee (8th to 5th) and
Davenport-Rock Island-Moline (10th to 6th) also gained in terms of rank from last
month.

In the 12 months growth league table, upward moves were recorded for MetroEast (6th to 5th) and Bloomington-Normal (8th to 6th) while downward moves
were recorded for Decatur (5th to 7th) and Springfield (7th to 8th).

Peoria, Kankakee, Rockford, Chicago and Champaign-Urbana-Rantoul remained in
the same place.

In the 12 months growth league table, Davenport-Rock Island-Moline stayed in the
last place while Peoria remained in the top of the ranks.
*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
Apr 2012
May 2012
Rank
Change**
1
Peoria (0.45%)
Bloomington-Normal (1.13%)
1
(+5)
2
Metro-East (0.24%)
Rockford (0.41%)
2
(+1)
3
Rockford (0.15%)
Champaign-Urbana-Rantoul (0.25%)
3
(+1)
4
Champaign-Urbana-Rantoul (0.08%)
Peoria (0.09%)
4
(-3)
5
Chicago (0.06%)
Kankakee (-0.01%)
5
(+3)
6
Bloomington-Normal (-0.02%)
Davenport-Rock Island-Moline (-0.12%)
6
(+4)
7
Springfield (-0.24%)
Chicago (-0.14%)
7
(-2)
8
Kankakee (-0.28%)
Springfield (-0.21%)
8
(-1)
9
Decatur (-0.5%)
Metro-East (-0.22%)
9
(-7)
10
Davenport-Rock Island-Moline (-0.92%)
Decatur (-0.69%)
10
(-1)
Growth over last 12-months:
Rank
Apr 2012
May 2012
Rank
Change**
1
Peoria (2.98%)
Peoria (2.76%)
1
(+0)
2
Kankakee (2.37%)
Kankakee (2.67%)
2
(+0)
3
Rockford (2.13%)
Rockford (2.33%)
3
(+0)
4
Chicago (0.89%)
Chicago (0.83%)
4
(+0)
5
Decatur (0.56%)
Metro-East (0.21%)
5
(+1)
6
Metro-East (0.55%)
Bloomington-Normal (0.01%)
6
(+2)
7
Springfield (-0.78%)
Decatur (-0.57%)
7
(-2)
8
Bloomington-Normal (-1.43%)
Springfield (-0.73%)
8
(-1)
9
Champaign-Urbana-Rantoul (-1.77%)
Champaign-Urbana-Rantoul (-1.25%)
9
(+0)
10
Davenport-Rock Island-Moline (-1.78%)
Davenport-Rock Island-Moline (-1.89%)
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/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