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.
FEBRURAY 2012
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ILLINOIS ECONOMIC REVIEW
E M P L O Y M E N
EMP LOY ME NT DA TA SUMM ARY
T
Illinois added 3,800 jobs in Jan 2012 at a rate of 0.07%, compared with a revised 1,800 job gains in Dec 2011. Compared to Jan 2011, Illinois has added 29,200 jobs. The three-month moving average of jobs, a more stable measure of labor market, was up by 1,700 jobs per month.
The Nation added 284,000 jobs, compared with a revised 223,000 job gains in Dec. The three-month moving average of jobs was up by 221,000 jobs per month.
The Rest of the Midwest (RMW) added 101,100 jobs in Jan at a rate of 0.54% after a revised
5,100 job gains in Dec. The three-month moving average was up by 36,000 jobs per month.
Since the beginning of the recession in Dec 2007, Illinois has posted negative job changes
31 times and positive job gains 18 times so far. The state of Illinois now has a net loss of
306,400 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 98,200 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 12.2%, 13.4% and
12.3%, compared to official unemployment rates of 9.4%, 7.8% and 8.3%.
Through Jan 2012, the cumulative job growth for Illinois, RMW and the Nation compared to
January 1990 stood at 7.78%, 9.49%, and 20.84%, respectively.
E MP LOY ME NT C HA RT
Total Non-
Farm
Employment
Dec 2011– Jan 2012
Growth Rate
%
Number of
Jobs
0.21 284,000
Last 12 months
Growth Rate
%
Number of
Jobs
1.54 2,014,000
Jan 2012
Shadow
U.R. **
12.2%
0.54 101,100 0.83 155,500 13.4%
0.07 3,800 0.52 29,200 12.3%
*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
120.00
115.00
110.00
105.00
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ILLINOIS ECONOMIC REVIEW
T OTAL N O N FA RM E M PLOYME NT GROWTH R AT E J AN 1990 –J AN 2012
130.00
125.00
0.40%
0.30%
0.20%
0.10%
0.00%
-0.10%
-0.20%
-0.30%
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
L A ST 12 M ONTH S TN F E MPLOYM ENT GROWT H R ATE F EB 2011 – J A N 2012
Feb/11 Mar/11 Apr/11 May/11 Jun/11 Jul/11 Aug/11 Sep/11 Oct/11 Nov/11 Dec/11 Jan/12
0.60%
Nation RMW IL
0.50%
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ILLINOIS ECONOMIC REVIEW
T OTAL N O N FA RM E M PLOYME NT GROWTH R AT E B Y S E CTOR S D E C 2011 – J AN 2012
20 Construction
-1.50% -1.00% -0.50% 0.00%
Nation
0.50% 1.00%
RMW
1.50% 2.00%
IL
30 Manufacturing
40 Trade, transportation & utilities
50 Information
55 Financial activities
60 Professional & business services
65 Education & health
70 Leisure & hospitality
80 Other Services
2.50%
90 Government
HA DOW UN E MPLOY MEN T
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 191,300 jobs would need to be created in Illinois.
The gap at the national level is much smaller.
4
8%
6%
4%
2%
0%
14%
12%
10%
8%
6%
4%
2%
0%
REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY
ILLINOIS ECONOMIC REVIEW
14%
Unemployment Rate Shadow Unemployment Rate
12%
10%
Unemployment Rate Shadow Unemployment Rate
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ILLINOIS ECONOMIC REVIEW
E
F
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
Jan 2012
5,679,800
189,600
579,600
1,139,000
99,600
364,000
846,200
851,300
523,400
246,600
830,800
Jan 2013 (p)
5,715,000
175,900
580,800
1,132,700
96,600
366,900
886,000
869,200
526,200
245,100
835,500
Number of
Jobs
19,400~35,200
-13,700
1,200
-6,300
-3,000
2,900
39,800
17,900
2,800
-1,500
4,700
Growth Rate %
0.34% ~ 0.62%
-7.23%
0.21%
-0.55%
-3.01%
0.80%
4.70%
2.10%
0.53%
-0.61%
0.57%
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.
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ILLINOIS ECONOMIC REVIEW
MSAs
Dec 2011*
Dec 2012
(p)*
Number of
Jobs *
Growth
Rate %
Growth
Sector with
Highest
Growth
Rate
(p)
Bloomington-Normal
Champaign-Urbana-
Rantoul
Chicago
Davenport-Rock
Island-Moline
Decatur
Kankakee
Peoria
Rockford
90,100
105,000
4,014,700
178,600
52,000
45,000
187,400
144,400
Springfield 112,800
*Total Non-Farm Jobs
90,700
104,400
4,055,000
175,800
51,600
45,000
188,500
143,700
112,900
300~600
-600~400
2,000~40,300
-2,800~1,500
-400~400
0~200
600~1,100
-700~2,000
100~150
0.3%~0.7%
-0.6%~0.4%
0.05%~1.0%
-1.6%~0.8%
-0.8%~0.8%
0%~0.4%
0.3%~-0.6%
-0.5%~1.4%
0.1%~0.15%
+
-
+
+
-
+
-
-
-
TTU (3%)
FIN (2%)
EDU (3%)
EDU (2%)
LEI (3%)
EDU (2%)
Sector with
Lowest
Growth
Rate (p)
MAN (-7%)
CON (4%)
CON (-5%)
PRO (-9%)
PRO (-12%)
CON (-4%)
MAN (5%) INF (-3%)
EDU (2%)
EDU (3%)
CON (-10%)
CON (-7%)
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ILLINOIS ECONOMIC REVIEW
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ILLINOIS ECONOMIC REVIEW
At the point of
2012- Jan
At the point of
2010-June
In 5 years 96,200 jobs/year 109,300 jobs/year
In 8 years
In 10 years
60,000 jobs/year 68,300 jobs/year
48,100 jobs/year 54,700 jobs/year
In 15 years 32,100 jobs/year 36,500 jobs/year
* The figure 579,400 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 104,000, the number of jobs needed to bring shadow and official unemployment rates together, the total number of jobs that Illinois needs to create is 579,400.
**The figure 32,700 represents the jobs recovered from Dec. 2009 (previous lowest level) through June
2010.
*** The figure 98,200 represents the jobs recovered from Dec. 2009 through Jan. 2012.
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ILLINOIS ECONOMIC REVIEW
I
J
R
S
Illinois job recovery by sector from Dec 2007 – Jan 2012
Construction
Manufacturing
Job Changes in
Recession
Period*
-63,900
-115,800
Job Recovery
Jan 2010-Nov
2011
-14,200
26,000
Recovery
Percentage
-22.22%
22.45%
Forecasted
Job Recovery
Jan 2010-Nov
2012
-27,900
27,200
Forecasted
Recovery
Percentage
-43.66%
23.49%
Trade, transportation & utilities (TTU) -96,800 17,800 18.39% 11,500 11.88%
Information
Financial activities
Professional & business services
-11,400
-33,000
-93,800
-4,700
-700
66,400
-41.23%
-2.12%
70.79%
-7,700
2,200
106,200
-67.54%
6.67%
113.22%
Education & health
Leisure & hospitality
Other Services
32,300
-22,300
-5,600
29,700
11,500
-9,700
--
51.57%
-173.21%
47,600
14,300
-11,200
--
64.13%
-200.00%
Government 4,800 -24,700 -- -20,000 --
*Recession period: Dec 2007- Dec 2009
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 22.45%, 18.39%,
70.79%, 51.57%, 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 -22.22%, -41.23%, -2.12% and -173.21% 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 Jan 2013, sector Other services is going to lose twice the jobs compared to the recession period of Dec 2007-Dec 2009
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ILLINOIS ECONOMIC REVIEW
C
S
*
126.39
(Dec-2007)
119.45
(Jun-2000)
115.09
(Nov-2000)
**
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)
121.11
(Dec 2011)
109.63
(Dec 2011)
107.74
(Dec 2011)
137.99
(Dec 2011)
106.40
(Dec 2011)
106.84
(Dec 2011)
107.88
(Dec 2011)
96.32
(Dec 2011)
125.68
(Dec 2011)
120.19
(Dec 2011)
107.10
(Dec 2011)
106.14
(Dec 2011)
107.70
(Dec 2011)
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
Negative growth
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
* Catch-up scenarios are based on average monthly growth rate over the previous 12 months. Nation already passed its previous peak at February 2005.
** 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.
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C B A I I I I N C R E A S E D I I N
J J A N U A R Y
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.
140
120
101.1 100.0
99.3
1 year forecast above trend trend 100
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
80
60
40
87.2 below trend
20
01/06 01/07 01/08 01/09 01/10 01/11 01/12 01/13
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ILLINOIS ECONOMIC REVIEW
METROPOLITAN STATISTICAL
AREA LEAGUE TABLES
Kankakee (2nd to 8th) experienced the deepest fall this month.
Davenport-Rock Island-Moline (8th to 10th), Springfield (1st to 2nd) and
Champaign-Urbana-Rantoul (4th to 5th) also dropped in terms of rank from last month.
The most remarkable upward move in December was recorded for Peoria (7th to
1st).
Chicago (5th to 4th), Rockford (9th to 7th), Decatur (10th to 9th) 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), Chicago (4th to 3rd), Springfield (5th to 4th) and Bloomington-
Normal (7th to 6th) while downward moves were recorded for Davenport-Rock
Island-Moline (6th to 7th), Rockford (3rd to 5th) and Kankakee (1st to 2nd).
Metro-East, Decatur, and Champaign-Urbana-Rantoul remained in the same place.
Champaign-Urbana-Rantoul stayed in the last place for the tenth 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.
13
6
7
4
5
8
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ILLINOIS ECONOMIC REVIEW
MSA League Tables*: Non-farm Employment Growth Rate
Monthly growth:
Rank
1
Nov 2011
Springfield (0.27%)
Dec 2011
Peoria (0.91%)
2
3
Kankakee (0.09%)
Metro-East (0%)
Champaign-Urbana-Rantoul (-0.02%)
Chicago (-0.03%)
Bloomington-Normal (-0.07%)
Peoria (-0.26%)
Davenport-Rock Island-Moline (-0.75%)
Rockford (-0.79%)
10 Decatur (-1.45%)
Growth over last 12-months:
Rank Nov 2011
Springfield (0.25%)
Metro-East (0.02%)
Chicago (-0.03%)
Champaign-Urbana-Rantoul (-0.14%)
Bloomington-Normal (-0.26%)
Rockford (-0.29%)
Kankakee (-0.4%)
Decatur (-0.54%)
Davenport-Rock Island-Moline (-0.88%)
Dec 2011
Rank Change**
1 (+6)
2
3
4
5
(-1)
(+0)
(+1)
6
7
(-1)
(+0)
(+2)
8
9
10
(-6)
(+1)
(-2)
1
2
3
4
5
Kankakee (6.05%)
Peoria (4.09%)
Rockford (0.97%)
Chicago (0.58%)
Springfield (0.34%)
Peoria (4.85%)
Kankakee (4.71%)
Chicago (0.55%)
Springfield (0.53%)
Rockford (0.4%)
Rank Change**
1
2
3
4
5
(+0)
(+0)
(+0)
(+5)
(+1)
6
7
8
9
10
Davenport-Rock Island-Moline (0.3%)
Bloomington-Normal (0.27%)
Metro-East (0.16%)
Decatur (-0.55%)
Champaign-Urbana-Rantoul (-3.21%)
Bloomington-Normal (0.07%)
Davenport-Rock Island-Moline (-0.26%)
Metro-East (-0.33%)
Decatur (-1.08%)
Champaign-Urbana-Rantoul (-1.46%)
6
7
8
9
10
(+2)
(-3)
(-1)
(-4)
(+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.
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ILLINOIS ECONOMIC REVIEW
Unemployment Claims
(Initial, IL)
40,000
Unemployment Claims
(Initial, US)
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
10,000
5,000 0
15