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.
MARCH 2012
REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY
ILLINOIS ECONOMIC REVIEW
EMPLOYMENT
E MP LOY ME N T DA TA S UM M A RY








Illinois added 6,500 jobs in Feb 2012 at a rate of 0.11%, compared with a revised 3,900 job
gains in Jan 2012. Compared to Feb 2011, Illinois has added 32,000 jobs. The three-month
moving average of jobs, a more stable measure of labor market, was up by 4,100 jobs per
month.
The Nation added 240,000 jobs, compared with a revised 275,000 job gains in Jan. The
three-month moving average of jobs was up by 246,000 jobs per month.
The Rest of the Midwest (RMW) added 48,600 jobs in Feb at a rate of 0.26% after a revised
87,900 job gains in Jan. The three-month moving average was up by 47,200 jobs per month.
Since the beginning of the recession in Dec 2007, Illinois has posted negative job changes
31 times and positive job gains 19 times so far. The state of Illinois now has a net loss of
299,800 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 104,800 new jobs.
The 12-month-ahead job recovery forecasts show that four sectors will experience faster
recovery rates in Jan 2013. For sectors such as Construction, Information and Other
services, they may continue to lose jobs with faster rates.
The shadow unemployment rates for Illinois, RMW and the Nation were 11.8%, 13.2% and
12.1%, compared to official unemployment rates of 9.1%, 7.7% and 8.3%.
Through Feb 2012, the cumulative job growth for Illinois, RMW and the Nation compared
to January 1990 stood at 7.94%, 10.43%, and 21.58%, respectively.
FEB 2012
March
2012
Positive
Total NonFarm
Employment
E MP LOY M E N T C HA RT
Jan 2011– Feb 2012
Last 12 months
Number of
Jobs
Feb 2012
Growth Rate
%
Number of
Jobs
Growth Rate
%
Shadow
U.R. **
Nation
0.18
240,000
1.55
2,025,000
12.1%
RMW*
0.26
48,600
1.00
186,600
13.2%
Illinois
0.11
6,500
0.57
32,000
11.8%
*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
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ILLINOIS ECONOMIC REVIEW
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 –F E B 2012
130.00
125.00
120.00
115.00
110.00
105.00
100.00
National
RMW
IL
95.00
1990
1991
LAST
1992
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 M A RC H 2011 – F E B 2012
Mar/11
Apr/11
May/11
Jun/11
Jul/11
Aug/11
Sep/11
Oct/11
Nov/11
Dec/11
Jan/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
Feb/12
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ILLINOIS ECONOMIC REVIEW
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 JA N
2012 – F E B 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
-2.00%
-1.00%
0.00%
1.00%
Nation
S HA D OW
2.00%
3.00%
RMW
4.00%
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 185,900 jobs would need to be created in Illinois.
The gap at the national level is much smaller.
4
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ILLINOIS ECONOMIC REVIEW
Illinois

14%
Unemployment Rate
Shadow Unemployment Rate
12%
10%
8%
6%
4%
2%
0%

US
14%
12%
Unemployment Rate
Shadow Unemployment Rate
10%
8%
6%
4%
2%
0%
5
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ILLINOIS ECONOMIC REVIEW
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
Feb 2012
5,686,400
195,700
582,200
1,134,000
98,300
365,000
847,600
852,900
525,300
246,200
829,600
Feb 2013 (p)
5,733,300
188,500
588,100
1,116,200
94,100
370,600
891,800
873,400
531,100
245,600
833,800
Number of
Jobs
12,300~46,900
-7,200
5,900
-17,800
-4,200
5,600
44,200
20,500
5,800
-600
4,200
Growth Rate %
0.22%~0.82%
-3.68%
1.01%
-1.57%
-4.27%
1.53%
5.21%
2.40%
1.10%
-0.24%
0.51%
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
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ILLINOIS ECONOMIC REVIEW
Employment Forecast for MSAs
Jan 2011*
Jan 2012
(p)*
Bloomington-Normal
89100
Champaign-UrbanaRantoul
MSAs
Sector
with
Highest
Growth
Rate
(p)
Sector
with
Lowest
Growth
Rate (p)
Number of
Jobs *
Growth
Rate %
Growth
89700
150~600
0.16%~0.70%
+
PRO (2%)
MAN (-10%)
104400
102800
-1600~800
-1.60%~0.80%
-
CON (3%)
MAN (-5%)
Chicago
4044800
4088400
1700~43600
0.04%~1.10%
+
MAN (6%)
CON (-7%)
Davenport-Rock
Island-Moline
Decatur
178000
175900
-2100~1500
-1.20%~0.80%
-
EDU (3%)
PRO (-7%)
52600
51500
-1100~600
-2.10%~1.20%
-
LEI (1.3%)
PRO (-7%)
Kankakee
43700
43700
0~400
0%~0.90%
+
EDU (1.5%)
CON (-6%)
Peoria
182100
179500
-2500~1900
-1.40%~1.00%
-
CON (2%)
MAN (-5%)
Rockford
147700
149900
1600~2200
1.00%~1.50%
+
MAN (5%)
CON (-12%)
Springfield
112700
112900
30~140
0%~0.10%
+
EDU (4%)
INF (-6%)
*Total Non-Farm Jobs
7
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ILLINOIS ECONOMIC REVIEW
8
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ILLINOIS ECONOMIC REVIEW
Barometer of Job Recovery
Illinois Recovery Scenarios
Growth Rate
To Recover
At the point of
2012- Feb
At the point of
2010-June
In 5 years
94,900 jobs/year
109,300 jobs/year
In 8 years
59,300 jobs/year
68,300 jobs/year
In 10 years
47,500 jobs/year
54,700 jobs/year
In 15 years
31,600 jobs/year
36,500 jobs/year
* The figure 661,300 is the number of jobs we need for 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 185,900, the number of jobs needed to bring shadow and official
unemployment rates together, the total number of jobs that Illinois needs to create is 661,300.
**The figure 32,700 represents the jobs recovered from Dec. 2009 (previous lowest level) through June
2010.
*** The figure 104,800 represents the jobs recovered from Dec. 2009 through Feb. 2012.
9
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ILLINOIS ECONOMIC REVIEW
I LLINOIS J OB R ECOVERY BY S ECTOR
Illinois job recovery by sector from Dec 2007 –Feb 2012
Job Changes in
Recession
Period*
Job Recovery
Jan 2010-Nov
2011
Recovery
Percentage
Forecasted
Job Recovery
Jan 2010-Nov
2012
Forecasted
Recovery
Percentage
Construction
-63,900
-8,100
-12.68%
-15,300
-23.94%
Manufacturing
-115,800
28,600
24.70%
34,500
29.79%
Trade, transportation & utilities (TTU)
-96,800
12,800
13.22%
-5,000
-5.17%
Information
-11,400
-6,000
-52.63%
-10,200
-89.47%
Financial activities
-33,000
300
0.91%
5,900
17.88%
Professional & business services
-93,800
67,800
72.28%
112,000
119.40%
Education & health
32,300
31,300
--
51,800
--
Leisure & hospitality
-22,300
13,400
60.09%
19,200
86.10%
Other Services
-5,600
-10,100
-180.36%
-10,700
-191.07%
Government
*Recession period: Dec 2007- Dec 2009
4,800
-25,900
--
-21,700
--


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
24.70%, 13.22%, 0.91%, 72.28%, 60.09%, respectively, from the
job lost during the recession.
However, Construction, Information and Other services
continued to lose jobs leading to negative recovery rates of
-12.68%, -52.63% and -180.36% respectively.
The 12-month-ahead job recovery forecasts show that the future
recovery for sector such as Trade, transportation & utilities will
slow down while it will increase for sectors such as
Manufacturing, 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 Feb 2013, sector Other services are forecast to lose almost
twice the jobs compared to the recession period of Dec 2007-Dec
2009.
10
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ILLINOIS ECONOMIC REVIEW
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)
121.36
(Feb 2012)
110.15
(Feb 2012)
107.81
(Feb 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)
136.56
(Jan 2012)
106.09
(Jan 2012)
107.67
(Jan 2012)
107.54
(Jan 2012)
96.88
(Jan 2012)
121.28
(Jan 2012)
116.67
(Jan 2012)
110.08
(Jan 2012)
105.73
(Jan 2012)
109.75
(Jan 2012)
Negative
growth
Negative
growth
Positive
growth
Negative
growth
Positive
growth
Positive
growth
Positive
growth
Positive
growth
Positive
growth
Positive
growth
Nation
RMW
IL
Recovery rates
at Jan 2012**
26.18%
27.46%
24.19%
Metro Areas***:
Bloomington
Normal
ChampaignUrbana
Chicago
Davenport- Rock
Island-Moline
Decatur
Kankakee
Peoria
Rockford
Springfield
Metro-East
-55.21%
-93.88%
24.49%
6.23%
16.81%
43.74%
49.71%
27.93%
95.07%
57.59%
* 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
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ILLINOIS ECONOMIC REVIEW
CBAI INCREASED IN JANUARY
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 100.0 in January 2012, a slight increase from
99.3 in December. The increase is attributed mainly to the improvement of manufacturing and
non-manufacturing employment in the Chicago region.

In January, the national and regional economy presented mixed features. The Federal Reserve
Board announced that manufacturing output rose 0.7% in January after having increased 1.5% in
December. Capacity utilization for manufacturing moved up 0.5%p to 77.0%. Meanwhile, output
and capacity utilization for total industry changed little in January. The nation’s unemployment
rate decreased to 8.3% in January from the previous month’s 8.5%.

The Chicago Fed reported that the Chicago Fed National Activity Index (CFNAI) decreased to
+0.22 in January, from +0.54 in December, but remained positive for the second straight month
for the first time in a year. In the Chicago region in January, manufacturing and nonmanufacturing employment increased 0.47% and 0.49% respectively while construction
employment fell 1.57% and retail sales are estimated to have decreased 0.64% in January.

In the coming months, the national economy is likely to maintain its bumpy recovery trend. The
Bureau of Labor Statistics reported total nonfarm payroll employment increased by 120,000 in
November. The private sector added 140,000 jobs, as employment rose in a number of serviceproviding industries. Government employment continued to trend down. For the local economy,
the projected time series show that construction sectors will decrease and retail sector will
decrease in the next month. Considering recent national economic conditions and movements of
projected CBAI, the Chicago economy is expected to experience a period of fluctuations and
continue its weak improving trend over the next several months.
CBAI (Current: 100.0)
1 month 3 month 1 year
Historical (ago)
99.3
101.1
87.2
Forecast (ahead)
96.7
89.0
88.7
12
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ILLINOIS ECONOMIC REVIEW
140
120
1 year
forecast
above
trend
101.1 100.0
100
trend
99.3
87.2
80
below
trend
60
40
20
01/06
01/07
01/08
01/09
01/10
01/11
01/12
01/13
13
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ILLINOIS ECONOMIC REVIEW
METROPOLITAN STATISTICAL
AREA LEAGUE TABLES
MSA LEAGUE TABLES SUMMARY*

Springfield (2nd to 7th), Peoria (3rd to 8th) and Decatur (5th to 10th) all
experienced the deepest fall this month.

Chicago (4th to 6th), Bloomington-Normal (8th to 9th) and Metro-East (1st to
2nd) also dropped in terms of rank from last month.

The most remarkable upward move in January was recorded for ChampaignUrbana-Rantoul (10th to 1st).

Kankakee (7th to 3rd), Davenport-Rock Island-Moline (9th to 5th), Rockford (6th
to 4th) also gained in terms of rank from last month.

In the 12 months growth league table, upward moves were recorded for Kankakee
(4th to 1st) and Metro-East (7th to 2nd) while downward moves were recorded for
Peoria (1st to 4th), Decatur (2nd to 5th), Chicago (5th to 6th) and Springfield (6th
to 7th).

Rockford, Davenport-Rock Island-Moline, Bloomington-Normal and ChampaignUrbana-Rantoul remained in the same place.

In the 12 months growth league table, Champaign-Urbana-Rantoul stayed in the
last place for the eleventh consecutive month.
*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.
14
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ILLINOIS ECONOMIC REVIEW
MSA League Tables*: Non-farm Employment Growth Rate
Monthly growth:
Rank
Dec 2011
Jan 2012
Rank
Change**
1
Metro-East(0.94%)
Champaign-Urbana-Rantoul(3.36%)
1
(+9)
2
Springfield (0.3%)
Metro-East(2.27%)
2
(-1)
3
Peoria (0.23%)
Kankakee (1.62%)
3
(+4)
4
Chicago (-0.03%)
Rockford (1.19%)
4
(+2)
5
Decatur (-0.12%)
Davenport-Rock Island-Moline (0.5%)
5
(+4)
6
Rockford (-0.18%)
Chicago (0.41%)
6
(-2)
7
Kankakee (-0.26%)
Springfield (0.37%)
7
(-5)
8
Bloomington-Normal (-0.73%)
Peoria (-0.41%)
8
(-5)
9
Davenport-Rock Island-Moline(-0.91%)
Bloomington-Normal (-0.43%)
9
(-1)
10
Champaign-Urbana-Rantoul (-1.67%)
Decatur (-0.55%)
10
(-5)
Growth over last 12-months:
Rank
Dec 2011
Jan 2012
Rank
Change**
1
Peoria (2.12%)
Kankakee (2.97%)
1
(+3)
2
Decatur (1.01%)
Metro-East (2.47%)
2
(+5)
3
Rockford (0.99%)
Rockford (2.29%)
3
(+0)
4
Kankakee (0.73%)
Peoria (1.59%)
4
(-3)
5
Chicago (0.62%)
Decatur (1.1%)
5
(-3)
6
Springfield (0.17%)
Chicago (1.01%)
6
(-1)
7
Metro-East (0.08%)
Springfield (0.91%)
7
(-1)
8
Davenport-Rock Island-Moline (-1.38%)
Davenport-Rock Island-Moline (-1.39%)
8
(+0)
9
Bloomington-Normal (-1.39%)
Bloomington-Normal (-1.65%)
9
(+0)
10
Champaign-Urbana-Rantoul (-2.62%)
Champaign-Urbana-Rantoul (-2.49%)
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.
15
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ILLINOIS ECONOMIC REVIEW
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
16