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*** UPDATED x1 *** Illinois economy “stuck in neutral”

Wednesday, Sep 20, 2017

* As I’ve tried to point out over the past several weeks, Illinois’ economy has been sliding downward for months. With all the other stuff going on, I neglected to post this press release the other day…

The Illinois Department of Employment Security (IDES) announced today that the unemployment rate increased +0.2 percentage points to 5.0 percent in August and nonfarm payrolls decreased by -3,700 jobs over-the-month, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. July job growth was revised down to show an increase of +600 jobs rather than the preliminary estimate of +2,100 jobs.

August’s monthly payroll drop kept over-the-year job growth well below the national average. While Illinois job growth has had its ups and downs since the beginning of the year, the 3-month trend shows average monthly gains of 1,100 jobs per month from June to August, while the six-month trend shows a -100 per month average job loss from March to August.

“The Illinois economy is stuck in neutral with hardly any growth over the past several months,” said IDES Director Jeff Mays. “As a result, this has caused the state to experience a rising unemployment rate over the past three months.”

“Illinois is working tirelessly to highlight our strongest assets – our strategic location and dedicated workforce – to bring more opportunity, competition and good paying jobs to our state,” said Illinois Department of Commerce and Economic Opportunity Director Sean McCarthy. “We need to couple that with lasting reforms and incentives to attract businesses and quality jobs in Illinois.”

In August, the three industry sectors with the largest gains in employment were: Trade, Transportation and Utilities (+6,600); Education and Health Services (+3,400); and Construction (+2,000). The largest payroll declines were in the following sectors: Leisure and Hospitality (-9,900); Professional and Business Services (-3,300); and Manufacturing (-3,000).

Over-the-year, nonfarm payroll employment increased by +23,600 jobs with the largest gains in these industry sectors in August: Professional and Business Services (+15,300); Financial Activities (+9,100); and Education and Health Services (+9,000). Industry sectors with the largest over-the-year declines include: Trade, Transportation and Utilities (-5,800); Government (-3,100); and Construction (-3,000). The +0.4 percent over-the-year gain in Illinois is about one-fourth as strong as the +1.4 percent gain posted by the nation in August.

The state’s unemployment rate is +0.6 percentage points higher than the national unemployment rate reported for August 2017, which increased to 4.4 percent. The Illinois unemployment rate is down -0.8 percentage points from a year ago when it was 5.8 percent. At 5.0 percent, the Illinois jobless rate stands -0.7 percentage points lower than January 2017.

The number of unemployed workers increased +4.8 percent from the prior month to 323,100, down -14.2 percent over the same month for the prior year. This was the third consecutive over-the-month gain in the number of unemployed persons. The labor force decreased -0.4 percent over-the-month and declined by -1.4 percent in August over the prior year. The unemployment rate identifies those individuals who are out of work and are seeking employment. An individual who exhausts or is ineligible for benefits is still reflected in the unemployment rate if they actively seek work.

* Despite the fact that construction is one of the bright spots, a capital bill would still help

IS THERE A CAPITAL BILL IN THE WORKS? Rauner: “I can say, I certainly hope so. I’ve advocated for a capital bill … since day one in office … I’ve encouraged conversations to occur. I believe conversations are occurring.”

What sources tell us: The legislative leaders’ discussion involved talk of a possible $3 billion to $5 billion capital bill that would involve a public-private partnership. We’re still unclear on the funding as parties are denying a gas tax would become part of it. And sources were jittery about whether this thing would even get off the ground.

Subscribers know more.

*** UPDATE ***  This is really weird. Either Natasha and I and others are being told something wrong, or, well, I dunno, but I still believe there’s a plan and there’s been no denial yet of that…


- Posted by Rich Miller        

27 Comments
  1. - Fax Machine - Wednesday, Sep 20, 17 @ 10:00 am:

    Isn’t there supposed to be money in a lockbox now for these projects after the amendment passed?


  2. - Rich Miller - Wednesday, Sep 20, 17 @ 10:11 am:

    ===money in a lockbox===

    There’s a lockbox, but it has very little money.


  3. - wordslinger - Wednesday, Sep 20, 17 @ 10:22 am:

    A steep August decline in leisure and hospitality (-9,900) is standard as vacations wrap up and students head back to college.

    Remove that category and August is +6,200 non-farm.


  4. - Arsenal - Wednesday, Sep 20, 17 @ 10:23 am:

    This is the kind of thing that matters more to Rauner’s re-election chances than the gaffes and staff shake-ups and legislative losses of the summer. He’s just not delivering for the state.


  5. - Lucky Pierre - Wednesday, Sep 20, 17 @ 10:24 am:

    I guess just raising taxes and not reforming our business or political environment does not qualify as economic development.


  6. - Annonin' - Wednesday, Sep 20, 17 @ 10:35 am:

    Good ole Jeffie. Always quick to rush to the negative. That sure seems like a way to push everything. Most nation data suggested unemployment #s drifting up because more are returning to the labor force. IL data does not help discern whether that is in play.
    GovJunk is for a construction bill as long as he can use scab labor for the work. When some of that happened in the Peoria area for an airport and hospital project the repair costs were staggering.


  7. - lake county democrat - Wednesday, Sep 20, 17 @ 10:39 am:

    People can carp about Rauner all they want - and much of it is deserved - but the forces dragging the state economy are bigger than anything that has happened the last two years. With no progressive income tax and the immense pension burden, the state is handcuffed to make the kind of investments you need to build on its assets (as McCarthy says, location and people). There’s also a looming brain drain - I hope Chicago gets Amazon but I hope even more that Milwaukee or St. Louis doesn’t get it: a terrible thing for Chicago would be another attractive midwest city (especially Milwaukee given its proximity).


  8. - Century Club - Wednesday, Sep 20, 17 @ 10:41 am:

    It’s been puzzling to me that none of the Democratic candidates for Governor have come out with a really strong jobs message. I mean, Biss is a sitting Senator - he can introduce a jobs bill at any moment. For that matter, Pawar could too, or Stratton on behalf of JB.

    Not only does it seem like it would appeal strongly to core constituencies in the Democratic primary, but without it, you’re basically ceding this argument to Rauner’s (laughable) reforms = jobs message.


  9. - sulla - Wednesday, Sep 20, 17 @ 10:43 am:

    “Most nation data suggested unemployment #s drifting up because more are returning to the labor force. IL data does not help discern whether that is in play.”

    Illinois’ Labor Force is at a ten-year low as of this month.

    Source: BLS.gov LAU data series, statewide, seasonally-adjusted.


  10. - Ron - Wednesday, Sep 20, 17 @ 10:57 am:

    “There’s also a looming brain drain”

    Not in Chicago. According to the latest Census estimates, the City now has the highest % of 4 year college educated of the top 5 largest cities.


  11. - Ron - Wednesday, Sep 20, 17 @ 10:58 am:

    What exactly is a “jobs” bill? Workers Comp reform will help reduce costs for employers, eliminating the corporate tax in IL would encourage employers to locate in IL.


  12. - Century Club - Wednesday, Sep 20, 17 @ 11:11 am:

    Well, Ron, since 2/3rds of Illinois corporations don’t pay income tax, you’re most of the way there.

    A jobs bill could be a capital plan, a summer jobs program, or anything else along those lines. Even a plan to recoup the jobs lost as a direct result of the budget stalemate would be great.


  13. - Lucky Pierre - Wednesday, Sep 20, 17 @ 11:12 am:

    Alderman Pawar has publicly stated that Chicago and Illinois should offer zero tax incentives for Amazon HQ 2 because of his mistaken belief that it is the public sector that drives the economy and the private sector and “greedy” millionaires and billionaires are hurting Illinois residents.

    He has little regard for the spending and tax revenue 50,000 good jobs would do for Illinois economy and budget deficits.


  14. - Ron - Wednesday, Sep 20, 17 @ 11:25 am:

    Ah, so you simply want government spending. Not a good plan for long run job growth.


  15. - Ron - Wednesday, Sep 20, 17 @ 11:26 am:

    Why not make it 100% of IL corporations paying no tax? Just tax the employees.


  16. - Lucky Pierre - Wednesday, Sep 20, 17 @ 11:35 am:

    There’s a good reason why most Illinois companies don’t pay state income taxes: They don’t owe federal income taxes, either.

    About two-thirds of Illinois companies don’t pay state income taxes, yet the idea of closing loopholes to address that gap ignores the reality that 95 percent of those companies had zero or negative taxable income at the federal level, according to the Illinois Chamber of Commerce and the Taxpayers’ Federation of Illinois.

    http://www.chicagobusiness.com/article/20140219/NEWS02/140219775/heres-the-real-reason-why-most-illinois-companies-dont-pay-state-income-taxes

    These corporations do pay one of the highest property tax burdens in America


  17. - Roman - Wednesday, Sep 20, 17 @ 11:41 am:

    == Is there a capital bill in the works? ==

    Even if it’s a Public-Private Partnership (subscribers know more,) any capital bill will require a some sort of new tax. Having just raised income taxes this summer and with the Cook County beverage tax dominating headlines in the Chicago media market, I don’t see how the legislature will support a new tax this fall or next spring ahead of an election.


  18. - Ron - Wednesday, Sep 20, 17 @ 1:26 pm:

    “These corporations do pay one of the highest property tax burdens in America”.

    yep


  19. - Northsider - Wednesday, Sep 20, 17 @ 1:34 pm:

    Pawar can’t introduce a jobs bill, Century Club; he’s not in the legislature.


  20. - Ron - Wednesday, Sep 20, 17 @ 2:09 pm:

    A summer jobs program? That is hardly a long term solution to IL job growth problems. That is a crime prevention program.


  21. - City Zen - Wednesday, Sep 20, 17 @ 2:27 pm:

    ==A steep August decline in leisure and hospitality (-9,900) is standard as vacations wrap up and students head back to college.==

    Not really. Past years have not seen such a decline:

    https://data.bls.gov/timeseries/SMS17000007000000001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true

    It looks like IL had an unprecedented run up this summer though. What was the reason for those gains?


  22. - wordslinger - Wednesday, Sep 20, 17 @ 2:39 pm:

    LP, your comments about Pawar are schizo. Tax incentives to attract private business is the definition of the public sector driving the economy.

    It’s also centralized planning, the state picking winners and losers. You’d call it socialism if taxpayers got an equity stake (which is a better deal on a public investment).

    As it is, if there’s an Amazon deal with EDGE credits, the state won’t see any new income tax revenue. It will be deducted from employee salaries and remitted to Amazon’s bottom line.

    There are opponents to that kind of giveaway across the political spectrum.


  23. - wordslinger - Wednesday, Sep 20, 17 @ 2:41 pm:

    CZ, more seasonal tourists, more seasonal hospitality workers.


  24. - Whatever - Wednesday, Sep 20, 17 @ 3:29 pm:

    ==As it is, if there’s an Amazon deal with EDGE credits, the state won’t see any new income tax revenue. It will be deducted from employee salaries and remitted to Amazon’s bottom line.==

    HB 162 took that part of the EDGE credit away for agreements entered into after 2014.


  25. - City Zen - Wednesday, Sep 20, 17 @ 3:32 pm:

    Word - In the link in my last post, look at the large increase this past summer. We’ve never had such a growth surge in the past. Plus growth post-summer typically continues upward. Why more “seasonal” workers this summer than ever before? Just seems odd, that’s all.


  26. - In a Minute - Wednesday, Sep 20, 17 @ 4:14 pm:

    A state’s economic well being cannot and should not be based on public works projects. SMH in dismay
    Sustained economic growth comes from the private sector. Illinois political class does not view the private sector as having any value except to provide the tax revenues to sustain a really bad governmental system.


  27. - wordslinger - Wednesday, Sep 20, 17 @ 5:31 pm:

    –A state’s economic well being cannot and should not be based on public works projects. SMH in dismay
    Sustained economic growth comes from the private sector.–

    And how does the private sector function without sustained public infrastructure investment, Dr. Friedman? Mule teams?


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