Unemployment numbers ‘mask weakness’ in labor market, state says

 

From Illinois Business Journal news services

CHICAGO – Illinois’ unemployment rate in August declined to 5.6 percent and nonfarm payroll employment shed 900 jobs, based on preliminary data released by the Illinois Department of Employment Security and the U.S. Bureau of Labor Statistics.

The Illinois department said Thursday that the state’s job numbers dropped for a third consecutive month, keeping Illinois below the national average and further delaying Illinois’ economic recovery from the 2007-2009 recession.

“The declining unemployment rate reflects the national trend of people leaving the workforce, not necessarily the number of unemployed finding employment, which masks the underlying weakness in our labor market,” said Jeff Mays, Director, IDES. “From January through June of this year, Illinois’ employment grew at a rate of 0.3 percent — half the average growth rate of all the other Midwestern states combined. Had Illinois grown at the average rate of its neighbors, employers would have added 34,000 jobs, more than doubling the actual new jobs reported in that timeframe?.”

The state’s unemployment rate is higher than the national unemployment rate reported for August, which decreased 0.2 percentage points over-the-month to 5.1 percent. The BLS revised July data, which showed a small drop (-800) in Illinois rather than the preliminary estimate of a small increase (+1,900). In August, the three industry sectors with the largest gains in employment were: Financial Activities (+2,600), Education and Health Services (+2,400) and Other Services (+1,800). The three industry sectors with the largest declines in employment were Manufacturing (-2,200); Trade, Transportation and Utilities (-2,100); and Construction (-1,900).

Over the year, nonfarm payroll employment increased by +41,200 jobs with the largest gains in Professional and Business Services (+14,500); Education and Health Services (+13,500); and Trade, Transportation and Utilities (+10,100). Several sectors posted over-the-year declines in August: Manufacturing (-7,100); Information Services (-2,100); Mining (-900); Government (-800); and Other Services (-700).

The unemployment rate identifies those individuals who are out of work and seeking employment. An individual who exhausts or is ineligible for benefits is still reflected in the unemployment rate if they actively seek work. IDES’ IllinoisJoblink.com (IJL) program, which helps jobseekers connect with hiring companies, recently showed that 174,121 help wanted ads were available and 61,674 resumes were posted. As many positions continue to remain unfilled, the Department continues its efforts to connect jobseekers to employers looking for qualified candidates.

In August, the unemployment rate stood 0.9 percentage points below the unemployment rate a year ago when it was 6.5 percent. The number of unemployed workers decreased -3.0 percent from the prior month to 362,500 and was down -14.6 percent over the same month for the prior year.

“Decreasing unemployment as a result of Illinoisans leaving the workforce is a hollow victory,” Illinois Department of Commerce & Economic Opportunity Director Jim Schultz said. “We need meaningful structural reform to overhaul our business climate and put Illinois on a path to real growth in order to bring businesses and jobs back to our state.”

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