Illinois posted slow job growth last year

The state’s unemployment rate is near the top nationwide

Illinois saw only slight job growth last year, and the state’s unemployment rate remained among the highest in the country.

In January, 319,000 Illinoisans were looking for work and couldn’t find it, according to federal data.

The primary culprit in the state’s slow economic growth and high unemployment is an unfriendly business environment resulting from high taxes and burdensome regulations.

Illinois’ 4.9% unemployment rate in January ranked eighth-highest in the country, according to the U.S. Bureau of Labor Statistics. Michigan was the only state in the Midwest with a higher rate.

From January 2025 to January 2026, Illinois added 7,900 jobs, a 0.13% increase. That was lower than the national average of 0.2% and 23rd in the U.S., the BLS data shows.

Compared with neighboring states, Illinois’ job growth was middle-of-the-pack last year. Missouri led the region, with a 0.89% increase. Kentucky was second, at 0.36%. Illinois’ 0.13% ranked third.

Michigan grew by 0.05%, landing in fourth place. The remaining neighboring states — Indiana, Wisconsin and Iowa — all lost jobs, according to the data.

Illinois has struggled since the pandemic to keep pace in job creation. Since January 2020, the state has added 25,900 jobs. Its post-COVID job recovery rate ranked 35th in the country and sixth out of seven neighboring states.

Private education and health services led Illinois job growth in 2025, adding 18,300 positions, according to the federal data. Next were 14,200 new jobs in mining, logging and construction and 6,600 in transportation and utilities.

Illinois’ biggest losses were in professional and business services, down 12,300 jobs, and retail trade, which lost 10,500. Wholesale trade (-6,100) and the federal government (-6,000) also saw significant losses in the state.

Illinois’ state and local tax burden is the highest in the nation. The state also levies the third-highest state corporate income tax, and its tax code is among the Midwest’s least friendly for business.

Illinois has many advantages, such as its diverse economy, central location and strong infrastructure. To take advantage of that, the state must strengthen its fiscal position, remove regulatory burdens and provide real tax relief — both to workers who are finding it difficult to remain and to job creators who are desperately trying to stay.