Illinois unemployment rate drops to 9.8 percent

January 21, 2012

By David Mercer, Associated Press

(AP Photo/File)
Statewide unemployment was 10 percent in November, a decrease of a tenth of a percent that was the first drop in six months.

Unemployment dropped to 9.8 percent in Illinois in December, state officials said Friday, a second straight monthly decrease that capped a year in which the jobless rate fell almost a full percentage point from 2010.

Statewide unemployment was 10 percent in November, a decrease of a tenth of a percent that was, no matter how slight a decline, the first drop in six months.

Friday's announcement followed reports this week that national unemployment is down and home sales in both Illinois and the nation are up. But the news was tempered by warnings that the state's economic recovery continues to involve almost as many steps backward as forward.

Even as the unemployment rate fell last month, the state lost a collective 4,100 jobs, the Illinois Department of Employment Security said in its monthly report on statewide joblessness. The state finished the year with 5.68 million jobs, a modest increase of 52,600 from 2010, just under 1 percent.

"What the report emphasizes is the unsteadiness that this recovery has taken," department spokesman Greg Rivara said. "It's not so much that the numbers are that surprising because there has been up and down movement."

The state averaged a gain of 4,400 jobs of a month for 2011, he said, compared to the roughly 18,000 jobs it lost, on average, through the recession.

Earlier this week, the federal government reported national unemployment dropped in December to 8.5 percent, a three-year low.

And on Friday, the National Association of Realtors said home sales — one of the economic indicators that have most stubbornly continued to drag — hit an 11-month high in December. Similarly, the Illinois Association of Realtors said statewide home sales were up 14 percent in December over a year earlier, though the median home price was down.

Those numbers, though, aren't strong enough to support meaningful gains in construction employment, some experts said.

Illinois lost 4,300 construction jobs in December, and added just 3,400 for the year.

"There may be some modest gains in infrastructure spending, maybe modest gains in commercial construction, but I still think housing is flat," said John Challenger, CEO of Chicago-based outplacement firm Challenger Gray & Christmas Inc.

The state lost 1,600 jobs in December among firms in the financial activities sector (and 3,100 for the year) and 1,300 in the trade, transportation and utilities sector. Trade, transportation and utilities firms added 14,500 jobs over the year, though, and one of the stronger growth areas in 2011.

Manufacturing continued to be a strong point in Illinois in December, adding 2,200 jobs to finish the year with 12,200 new positions.

Some of that strength is likely due to improvements in auto sales. Just this week General Motors announced it had overtaken Toyota as the world's top auto seller. Illinois has dozens of auto parts makers, as well as major auto manufacturing plants such as Ford Motor Co.'s plant in Belvidere and Mitsubishi's plant in Normal.

"Manufacturers are receiving more orders for products and some (companies) are able to bring on that second shift now," said Jim Nelson, a vice president of the Illinois Manufacturers Association. "Some automotive companies are thinking about bringing on a third shift."

Challenger said the rebound in manufacturing is something the state and country should be able to build on in 2012.

"I think the U.S. is becoming more competitive again in manufacturing," he said. "Not in a way that's going to return us to the days of the last era, the industrial era, but ... manufacturers have been upgraded, invested a lot of capital in technology. They've focused on their niches."

Government employment also continued a modest rebound in December, adding 400 jobs after an increase of 500 in November. Governments, particularly at the local level, were among the biggest job cutters in Illinois in 2011. The state struggled with a multibillion-dollar budget deficit that meant less money for many county and municipal governments. In all, Illinois' government sector shed 8,900 jobs in 2011, the largest decrease in any sector.

Now, at least some towns are starting to generate enough money through local taxes and other sources to hire a few people.

The city of Normal in central Illinois plans to add about five employees this year, most for a new transportation center, city manager Jim Peterson said. The city hasn't added anyone since 2007, and has cut a number of jobs through layoffs and attrition over the past few years.

"Our budget has certainly stabilized," he said. "Our revenue growth has been, at least for this last year, better than expected. It's given us a little flexibility to at least hire these new employees."