Illinois unemployment dips below 5 percent for first time since 2007
Dozens of young peopel interview with about 18 employers April 6, 2017, as part of a youth job fair at Rebano Church in Chicago’s Humboldt Park neighborhood. According to organizers, 498 youths registered for the fair. (Abel Uribe / Chicago Tribune)
Illinois’ unemployment rate fell below 5 percent last month for the first time in a decade, significantly narrowing its persistent gap with the national rate.
The 4.9 percent March rate was a sharp drop from 5.4 percent in February, and down from 6.1 percent a year before, according to preliminary figures released this week by the Illinois Department of Employment Security. It was the biggest monthly decrease in the country.
The state is nearing the so-called natural rate of unemployment, which is the level healthy economies gravitate to in the long run, taking into account natural movement between jobs. The Congressional Budget Office expected a 4.7 percent natural unemployment rate for this year.
Still, Illinois’ unemployment rate remained higher than the national average, which was 4.5 percent in March, and that of most neighboring Midwest states. Indiana and Missouri hit 3.9 percent unemployment in March and Wisconsin was at 3.4 percent. Michigan’s was higher, at 5.1 percent.
Lawrence Officer, professor of economics at the University of Illinois at Chicago, said the drop in unemployment is "great news" for Illinois, but he is concerned that it remains markedly higher than its neighbors.
"That’s serious, because if people are going to move, they’re likely to move to a neighbor," he said. Two factors potentially contributing to the disparity are the more pro-business policies of other states and Illinois’ higher minimum wage, he said, though structural and demographic factors also could be at play.
The Chicago metro area also saw a big drop in its unemployment rate, to 4.6 percent in March from 5.2 percent in February.
Illinois’ unemployment rate has declined for three straight months. The ranks of the unemployed fell by nearly 30,000 in March compared with the month before, and the number of employed people grew by more than 26,000. The labor force lost 3,300 people.
The unemployment rate counts only people who are not working but are looking for work, and does not take into account those who grew so discouraged that they gave up looking or those who are working part-time but want full-time jobs.
A separate survey of employers showed worse news from the payrolls.
The number of nonfarm jobs in Illinois declined by 8,900 in March, with the biggest losses in construction, professional and business services and government. Leisure and hospitality saw the most job gains for month.
In addition, February’s job growth was revised down to show an increase of 14,800 jobs rather than a gain of 25,600 jobs as was initially reported when that month’s preliminary data were released.
That means Illinois still has not returned to peak employment reached in September 2000. And its job growth rate over the year, at 0.4 percent, lags well behind the nation’s 1.5 percent.
"The usual pattern is that Illinois weakens more than the nation but grows less than the national average when both are on the upswing," agency director Jeff Mays said in a news release. "This persistent lag in job growth explains why it took 10 years to push the unemployment rate below 5 percent."
National job growth in March also was disappointing. The 98,000 jobs the U.S. added that month was well below the 180,000 expected.