ILLINOIS ECONOMIC REVIEW

advertisement

ILLINOIS ECONOMIC

REVIEW

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

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

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.

JAN 2012

E MP LOY ME NT C HA RT

February

2012

Positive

Total Non-

Farm

Employment

Nation

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%

RMW*

0.54 101,100 0.83 155,500 13.4%

Illinois

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

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

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%

3

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

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

S

HA DOW UN E MPLOY MEN 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 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%

US

12%

10%

8%

6%

4%

2%

0%

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

14%

Illinois

Unemployment Rate Shadow Unemployment Rate

12%

10%

Unemployment Rate Shadow Unemployment Rate

5

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

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

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.

6

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

Employment Forecast for MSAs

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%)

7

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

8

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

Barometer of Job Recovery

Illinois Recovery Scenarios

To Recover

Growth Rate

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.

9

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

I

LLINOIS

J

OB

R

ECOVERY BY

S

ECTOR

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

10

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

C

ATCH UP

S

CENARIO

Catch-up Scenario

*

of Previous Peak Job Index in Illinois

Previous Peak

Nation

RMW

IL

126.39

(Dec-2007)

119.45

(Jun-2000)

115.09

(Nov-2000)

Metro Areas

**

:

Bloomington

Normal

Champaign

Urbana

Chicago

Davenport- Rock

Island-Moline

Decatur

Kankakee

Peoria

Rockford

Springfield

Metro-East

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)

Current

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)

Catch-up

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

Periods for

Catch-up

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.

11

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

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

12

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

METROPOLITAN STATISTICAL

AREA LEAGUE TABLES

MSA LEAGUE TABLES SUMMARY*

 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

9

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

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.

14

REGIONAL| ECONOMICS | APPLICATIONS | LABORATORY

ILLINOIS ECONOMIC REVIEW

Unemployment Claims (Initial)

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

Download