* 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.
- Carl Nyberg - Wednesday, Jan 29, 14 @ 4:37 pm:
Moody’s is the outfit that blessed the toxic assets that caused the financial crisis, right?
They did it b/c they had a conflict of interest, right?
No one was held accountable, right?
They are aligned with the financial sector people who are waging the war on government employees, right?
And they just mistakenly ranked Illinois in the bottom 2%, when the correction put Illinois significantly higher.
Forgive me for not attaching much import to rich people carrying the water for rich people when there are no consequences for being criminally incompetent or fraudulent.
- Carl Nyberg - Wednesday, Jan 29, 14 @ 4:38 pm:
In fact, Illinois should pass a law protecting investors from fraud by Moody’s and other rating agencies.
- Grandson of Man - Wednesday, Jan 29, 14 @ 4:43 pm:
What Carl Nyberg said.
- Wordslinger - Wednesday, Jan 29, 14 @ 4:52 pm:
The horse they rode in on.
Don’t care. They’ve proven themselves to be prostitutes. They have no credibility.
Didn’t use to be like that. remember Arthur Anderson before Enron? Same deal with moodys before the crash. A brand of integrity, compromised beyond redemption.
I used to work with the current Moody’s Illinois guy in new York back in the day. The 80s. Long story short, weigh and sample his opinions before you buy them.
- Norseman - Wednesday, Jan 29, 14 @ 4:59 pm:
Me three!
- OneMan - Wednesday, Jan 29, 14 @ 5:00 pm:
Yes it is all a big rich guy conspiracy…..
Glad you figured it out….
Because the improvement in Illinois unemployment rate obviously indicates we are doing great at job growth…
I would say more, but I have to cause some more repression inherent in the system…
- anon - Wednesday, Jan 29, 14 @ 5:01 pm:
Am I interpreting this statement correctly: Moody’s is stating that one of the biggest drag on the state’s economy is the lack of hiring (past layoffs) of state, county, and city employees?
Hmmm, so we should cut the state budget even more?
- lake county democrat - Wednesday, Jan 29, 14 @ 5:07 pm:
All I know is when I see New York running tv ads offering no biz taxes for 10 years and boasting of its low inheritance taxes, you start to wonder: they ain’t no sun-belt/no-social-services/middle-of-nowhere state and they seem to have their act together.
- circularfiringsquad - Wednesday, Jan 29, 14 @ 5:14 pm:
It is good to see that after about 6+ years some of you are beginning to understand the “rating agencies” are frauds that should have been run out of town or locked up long ago.
However their nonsense will mute the FarmerBrucey attacks….TFB Farmer
- Just The Way It Is One - Wednesday, Jan 29, 14 @ 5:15 pm:
Things just keep lookin’ up for Quinn on what has alREADY been a VERY good day for the Governor…because Good news like this is just yet another sign of that “Comeback” Road he insisted all day in his assertions to us 13 Million folks (in his overall, best SOTS Speech yet) that our Beloved Home State HAS been ON–and now he’s got more real, tasty “proof” to toss into that ever better-tastin’ Illinois Brand “Pudding” he was stirring up for us all to see earlier today…!”
- Juvenal - Wednesday, Jan 29, 14 @ 5:17 pm:
Anon:
You are correct.
An important fact that Conservatives like to ignore is that the main reason that Illinois lags behind other states in job growth is because of layoffs and hiring freezes in local government and secondarily, state government.
- Juvenal - Wednesday, Jan 29, 14 @ 5:25 pm:
And i say “secondarily” state government because the state workforce is puny compared to the hundreds of thousands of local government employees, particularly school districts and police and fire.
That said, state spending on education clearly has an immediate impact on the economy if it means hiring more teachers, school social workers, etc.
That is why the Republican candidates support The board of education’s call for a $1 billion increase in school funding. Or maybe the opposite–I dont remember.
- walker - Wednesday, Jan 29, 14 @ 5:25 pm:
Yes, Moody’s and most other financial analysts and independent economists, know that cutting government spending, and cutting government employment, is a drag on the economy (in the short term at least), and has been a major drag on our national recovery for the last three years.
- MrJM - Wednesday, Jan 29, 14 @ 5:30 pm:
I can’t believe commenters would suggest that credit ratings agencies would ever let the opportunity for big profits to make them less than completely honest in their ratings.
http://www.cnbc.com/id/101188197
It’s crazy talk!
– MrJM
- plutocrat03 - Wednesday, Jan 29, 14 @ 6:58 pm:
“state workforce is puny”
Did you forget to count the staff in the hundreds and hundreds of taxing bodies that exist here, but are integral to other states?
- Judgment Day - Wednesday, Jan 29, 14 @ 6:58 pm:
“I can’t believe commenters would suggest that credit ratings agencies would ever let the opportunity for big profits to make them less than completely honest in their ratings.”
It’s not about the opportunity to make big profits going forward. It’s all about keeping what they currently have made in the recent past, and staying in business in the future.
The big three (Moody’s, Finch, and S&P) are all terrified of the fed case against S&P. If the fed’s win, the business model that has been used by Moody’s, Finch, and S&P is put in real jeopardy, and that means all those dubious bond issues pushed out there based on really questionable rating processes are now potentially liable to a vast amount of litigation.
That’s seriously big money, and if the fed’s get a clear cut win, potentially say ‘Goodbye’ to the big ratings agencies. It’s AIG all over again - times 3.
Going to be really interesting to see how the dirty laundry avoids coming out from this one.
“An important fact that Conservatives like to ignore is that the main reason that Illinois lags behind other states in job growth is because of layoffs and hiring freezes in local government and secondarily, state government.”
The bigger reason behind the layoffs and cutbacks in local government is because the still on-going impacts to the real estate property tax base. Your property tax base (taxable value) in many areas of IL is still decreasing, but the tax rates are going up, with the end result being little, if any increase in overall property tax revenues.
Maybe 1-2% increase in property tax revenues (mostly tax cap related), but that’s not even keeping up with cost increases. Not to mention increased pension and upcoming health care costs.
Short story: More local government cutbacks on the horizon.
- Michelle Flaherty - Wednesday, Jan 29, 14 @ 7:06 pm:
C’mon, these reports and rankings are made up more to gin up attention for Moody’s more than anything else. It’s BuzzFeed for Wall Street (with all sincere apologies to BuzzFeed.)
- Formerly Known As... - Wednesday, Jan 29, 14 @ 8:42 pm:
Funny how those ratings change after a few phone calls and emails.
The more things change, the more they stay the same.
- 47th Ward - Wednesday, Jan 29, 14 @ 8:46 pm:
Try buying a single family home in Lincoln Square, Ravenswood or North Center. I am, and I don’t believe anyone who tells me the housing market is less than red hot.
- ASAP - Wednesday, Jan 29, 14 @ 10:20 pm:
50 to 40 is still bad news! I hope the Governor can get some help from the other Moodys. You know the Moody brothers.
- Upon Further Review - Wednesday, Jan 29, 14 @ 11:55 pm:
I really expected Congressional hearings about the financial bubble that caused the real estate market to collapse. The Community Reinvestment Act was a disaster waiting to happen. Freddie Mac and Fannie Mae were wildly mismanaged, but House Democrats, including Franks and Waters, shouted down any efforts to stop the train wreck that was imminent. If Republican legislators had sponsored such a program, there would be people being fitted for orange jump suits, but partisan politics halted any meaningful inquiry and Rahm Emanuel has never been held accountable for his role as a well paid federal regulatory appointee charged with stopping the abuses that went unchecked. What Moody’s role was, I cannot say, but there is plenty of blame to go around. It is not discriminatory not to lend money and issue mortgages to people who have insufficient income or credit to make monthly payments. Oh, yes, they all meant well.
- PoolGuy - Thursday, Jan 30, 14 @ 8:25 am:
this is after all only a projection. I’m sure Moody’s projections have been proven incorrect or off base before. the year of 2014 has to transpire first before you can say this was right or wrong, better or worse.