* The projection by Moody’s Analyticals that Illinois ranked 50 out of 50 in likely 2014 job growth has brought critics out of the woodwork. The firm, however, has revised its projection and moved Illinois up ten spots, to 40th. Still lousy, but at least it ain’t the worst in the freaking country. An e-mail from Moody’s to the governor’s office..
The state moved up 10 spots like we discussed, with the 2014 projection for Illinois job growth increasing from 1% to 1.2%. When it comes to the job market, slower healing in housing and government is primary reason Illinois has lagged behind during the economic recovery. In terms of the job market, industries such as construction, finance and state/local government have significantly underperformed whereas other industries have performed in line with the nation. Construction, finance and state/local government made some progress in 2013 but it was limited and in the near-term they will continue to be a drag on the state’s relative performance.
As for the better forecast and improved ranking in January, this reflects (1) stronger than anticipated economic data toward the end of last year, including leading indicators that suggest momentum is strong entering into 2014, (2) limited fall-out from the federal government shutdown and the agreement by lawmakers to reverse some of the spending cuts under sequestration over the next two years, (3) better performance of manufacturing and the fact that strengthening private sector demand should lessen the need to trim inventories by curtailing output. Since pension reform was assumed in the forecast its passage did not directly impact the forecast, though it does reduce downside risk in the outlook.