Illinois payrolls stagnant, unemployment rate 35% higher than U.S. average
Illinois’ non-farm payrolls only added 2,500 jobs from mid-July to mid-August. Unemployment was steadily high as the rest of the nation recovered.
Illinois added just 2,500 jobs from mid-July through mid-August, virtually unchanged from the previous month according to data released by the Illinois Department of Employment Security.
The sluggish August jobs report comes on the heels of a strong performance in July, in which revised numbers show the state added 38,100 jobs. August was the worst month for Illinois jobs since April.
At the industry level, results were mixed. Five major industries shed jobs, five added jobs and one remained unchanged in August.
Of the industries that added jobs, leisure and hospitality grew the most with 5,800 (+1.2%) payroll jobs. Manufacturing gained 3,900 (+0.7%) jobs; government payrolls grew by 1,900 (+0.2%); information payrolls expanded by 300 (+0.3%); and mining added 100 (+1.5%) jobs.
In terms of industries that lost jobs, educational and health services lost the most jobs at -4,900 (-0.5%) in August. Trade, transportation and utilities lost 2,300 (-0.2%) jobs; other services payrolls shrank by 1,300 (-0.5%); construction cut 700 (-0.3%) jobs; and financial activities lost 300 (-0.1%) jobs last month. Professional and business services payrolls remained unchanged in August.
Despite meager growth in payrolls during the month, Illinois’ unemployment rate did fall from 7.1% to 7% in August. However, the state continued to fall behind the national recovery, as the national unemployment rate fell from 5.4% to 5.2%. That means Illinois’ unemployment rate is now 35% higher than the national average.
Making matters worse for the 435,900 Illinoisans still out of work, Illinois lawmakers passed a $42.3 billion budget that was unbalanced for the 21st year in a row despite imposing $655 million in tax hikes that specifically hurt investment and job creation. Those taxes will hinder Illinois’ economy as it attempts to recover.
The other jobs threat is a $5.8 billion deficit in the state’s unemployment insurance trust fund. The state Sept. 6 missed a federal loan payment deadline, meaning a $4.2 billion interest-free federal loan used to cover unemployment benefits is now costing taxpayers $60 million in interest a year and is likely triggering automatic tax hikes and benefit cuts that are expected to further damage Illinois’ weak job market.
Ignoring how public policy, and specifically taxation, impacts a fragile COVID-19 economic recovery will only lengthen and deepen Illinois’ struggles.