Information sector bright spot as Illinois job market remains sluggish

Illinois showed slow job growth as the state trailed national trends. Unemployment was at 4.4% in August, slightly above the national rate

Illinois added just 5,900 jobs during the past year, a 0.1% increase that puts the state far behind the national average and neighboring states.

The information sector was a bright spot. It grew at a 5.38% rate and created 4,800 jobs, the most in the nation during this time.

With unemployment at 4.4% in August, about 292,000 Illinoisans were looking for work, highlighting ongoing challenges in the state’s job market. Unemployment improved from 4.6% in July and was close to the U.S. rate of 4.3% for August.

Illinois’ 4.4% unemployment rate was tied for 12th highest in the nation. It put Illinois ahead of states such as California, Nevada and Michigan, and behind most neighboring states such as Wisconsin at 3.1% and Indiana at 3.6%.

While Illinois’ unemployment rate has declined modestly in recent months, that’s largely because people stopped looking for work. Illinois’ labor force participation rate has declined from 65.1% in December 2024 to 64.2% in August 2025. Illinois’ labor force level is down by 71,983, while the unemployment level is down 31,584 since the start of the year.

The state’s job growth has been disappointing during the past year. From August 2024 to August 2025, Illinois added only 5,900 jobs, representing a 0.1% increase. This performance ranks Illinois 45th out of 50 states for job growth.

The nation added 1,466,000 jobs during the same period, growing at a much stronger 0.93% rate. If Illinois had matched the national rate, the state would have created 51,115 jobs. South Carolina led all states in relative terms with a 3.06% growth rate, or 72,000 jobs.

Not all sectors performed the same way. Illinois saw its biggest job gains in the information sector, which added 4,800 jobs for a solid 5.38% growth rate. That rate led the nation and far outpaced neighboring states, which saw a 0.3% decline in information jobs.

State government added 3,800 jobs for a 2.49% growth rate, while private education and health services contributed the most jobs overall with 18,600 new positions, growing 1.87%.

Several important sectors lost jobs. Wholesale trade lost 3,900 jobs (down 1.29%), professional and business services shed 11,600 jobs (down 1.26%) and federal government employment dropped by 2,700 jobs (a 3.27% decline). These losses in key sectors helped drag down the state’s overall job performance.

Looking at private-sector industries only, Illinois saw job growth in six out of 11 major sectors, but only three of those 11 sectors grew faster than the same industries in neighboring states.

Missouri led the way among Illinois and its neighboring states with 33,900 new jobs (1.13% growth), followed by Michigan with 44,100 jobs (0.98% growth), and Kentucky with 19,800 jobs (0.97% growth). Wisconsin added 22,800 jobs (0.75% growth), and Indiana gained 13,600 jobs (0.41% growth). Illinois came in sixth place among the seven neighboring states with its 5,900 jobs (0.1% growth), beating only Iowa, which lost 2,300 jobs (down 0.14%).

Illinois continues to struggle with its recovery from the pandemic. Since January 2020, the state has added only 12,800 jobs, representing just 0.21% growth compared to its pre-pandemic workforce. Nationally, employment has increased by 4.94% during that time. This performance ranks Illinois 47th out of 50 states in pandemic recovery. Among its neighboring states, Illinois ranks last – seventh out of seven states – in job recovery since the pandemic began.

The primary culprit in the state’s slow economic growth and high unemployment is an unfriendly business environment thanks to high taxes resulting from a constantly mismanaged budget.

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

Illinois has many advantages such as its diverse economy, central location and strong infrastructure. To take advantage of this, Illinois must implement pro-growth policy reforms that will allow the state to better capitalize on its many advantages. These include strengthening its fiscal position, removing regulatory burdens, and providing real tax relief both to workers who are already finding it difficult to remain and to job creators who are desperately trying to stay.