Illinois payroll stagnates and unemployment rate is 35% higher than the US average
Illinois nonfarm payroll added just 2,500 jobs from mid-July to mid-August. Unemployment was steadily high as the rest of the nation recovered.
Illinois created just 2,500 jobs from mid-July to mid-August, virtually unchanged from the previous month, according to data released by the Illinois Department of Job Security.
August’s slow jobs report follows a strong performance in July, in which revised figures show the state created 38,100 jobs. August was the worst month for jobs in Illinois since April.
At the industry level, the results have been mixed. Five major industries lost jobs, five added and one remained unchanged in August.
Among the industries that created jobs, leisure and hospitality grew the most with 5,800 (+ 1.2%) salaried jobs. Manufacturing gained 3,900 (+ 0.7%) jobs; the government’s payroll increased by 1,900 (+ 0.2%); the information payroll increased by 300 (+ 0.3%); and mining added 100 jobs (+ 1.5%).
In terms of industries that lost jobs, education and health services lost the most jobs at -4,900 (-0.5%) in August. Trade, transport and public services lost 2,300 (-0.2%) jobs; the payroll for other services fell by 1,300 (-0.5%); construction eliminated 700 (-0.3%) jobs; and financial activities lost 300 (-0.1%) jobs last month. Professional and commercial services payrolls remained unchanged in August.
Despite weak payroll growth during the month, Illinois’ unemployment rate fell from 7.1% to 7% in August. However, the state continued to lag behind the national recovery, with the national unemployment rate falling 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 Illinois residents still out of work, Illinois lawmakers passed a $ 42.3 billion budget that was out of balance for the 21st year in a row despite taxing $ 655 million tax increases that specifically hurt investment and job creation. These taxes will hamper the Illinois economy as it attempts to recover.
The other threat to jobs is a $ 5.8 billion deficit in the state’s unemployment insurance trust fund. On September 6, the state 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 likely triggers automatic tax hikes and benefit cuts that are expected to further damage Illinois’ weak labor market.
Ignoring the impact of public policies, and particularly taxation, on a fragile economic recovery from COVID-19 will only lengthen and deepen Illinois struggles.