Chicago business activity growing for first time since November 2023

Chicago employment situation improves after hitting lowest level since 2009 in December 2025.

Chicago businesses expanded in January for the first time in 25 months, according to the Chicago Business Barometer. Chicago had a score of 54.0 for the month, up from 43.5 the previous month. A score below 50 indicates decline.

The rebound in overall activity was driven by an increase in employment, which rose 17.5 points from December’s score, the lowest since 2009.

The barometer surveys supply chain professionals across industries on a range of factors, including:

• Number of new orders
• Inventories
• Production
• Employment
• Supplier deliveries.

It asks businesses whether there have been increases, decreases or no change in these factors for their companies, then calculates a single overall indicator of the health of Chicago’s economy.

After 25 months of contracting activity, the baseline for achieving expansion is lower, making an overall expansionary score easier to achieve relative to previous months.

Overall expansion was driven by increases in employment, new orders, order backlogs and production.

The Chicago area’s employment situation remains challenging. The area’s unemployment rate was 4.5% in December, above the 4.3% national rate. The area’s rate was 4.1% in September. Chicago’s unemployment has lagged the national average since December 2019, when the area’s rate of 3.0% was below the national rate of 3.6%.

Almost all of the Chicago area’s job gains from November 2024 to November 2025 were in government with 19,800 and education and health services with 21,200. Professional and business services lost 11,200 jobs, and trade, transportation, and utilities lost 10,000.

Chicago’s unemployment would be higher if more people pursued work. Illinois’ labor force participation rate has declined from 65.1% in December 2024 to 63.81% in December 2025. Inthat time, the national rate remained stable, only declining by 0.1 percentage points to 62.4%. Throughout 2025, more than 108,000 Illinoisans left the workforce altogether.

While the U.S. economy as a whole grew 2.9% in 2023, the Chicago-Naperville-Elgin region grew at only 1.4%, according to federal data.

To expand business activity more regularly, the city of Chicago needs to focus on pro-growth policies such as:

• Establishing fiscal stability. Research shows fiscal stability is a prerequisite for economic growth and is essential for attracting private investment and expanding the tax base.
• Simplifying the tax code to make it easier for businesses to operate and grow.
• Reducing corporate property taxes, which are the highest among large cities and more than double the average, according to a recent report.    

Although Chicago politicians have a long history of imposing high taxes on the city, recent years have seen new taxes proposed and enacted that take the city’s taxes to another level. One unsuccessful proposal was for a “head tax” of $33 per employee for businesses over 500 people. The city avoided this job-killing tax. But it did increase the tax on cloud-based computer services from 11% to 15%.

Chicago needs to foster business, not find more harmful taxation that further extends its decline.