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* From the Commission on Government Forecasting and Accountability’s FY 2026 Economic Forecast and Revenue Estimate and FY 2025 Revenue Update…
• [National] In February, an aggregation of economic forecasts predicts average real GDP growth of 2.2% for 2025 and 2.0% for 2026.
Real GDP in Illinois
• Illinois has consistently grown at a slower rate than the U.S. as a whole.
• Since 1998, the U.S. has averaged real GDP growth of 2.4% per year, while Illinois has averaged growth of 1.4%.
• Illinois has only grown faster than the nation in three years between 1998 and 2023.
• Illinois contracted in the first quarter of 2024 (-1.8%), before rebounding in the second (2.8%) and third quarters (2.0%).
• In February, S&P Global forecasted real GDP growth for Illinois of 1.8% for 2025 and 1.7% for 2026.
* NPR…
Figures released by the Commerce Department Wednesday show that the United States’ gross domestic product contracted at an annual rate of 0.3% in the first quarter of the year, after growing at a solid pace of 2.4% in the final months of 2024. […]
Growth was dragged down in part by a surge of imports, as businesses and consumers raced to stock up before Trump’s sweeping tariffs took effect in early April. Imports are a net negative for GDP. Government spending was also down.
Personal spending, which is the biggest driver of the U.S. economy, also slowed during the first quarter, after robust growth at the end of last year. Personal spending grew at an annual rate of just 1.8% in January, February and March — less than half the pace of the previous quarter.
While the job market has so far held up well, with an unemployment rate of just 4.2% in March, the Conference Board’s survey found expectations about the job market are the worst since 2009, when the economy was hemorrhaging hundreds of thousands of jobs every month.
You’ll recall that COGFA’s projected revenue estimates were significantly lower than the governor’s budget office projections last month.
The governor’s budget director at one point hinted that April’s tax receipts might out-perform expectations, and we’ll know more in a few days or so about that (and since April’s receipts will be based mainly on last year’s income, they could very well be significantly higher). Illinois’ unemployment rate in March was 4.8 percent, unchanged from the previous month and down a tick from the previous year. Employment is a hard indicator. When jobs fall, trouble is afoot. But that hasn’t yet been reported. And the GDP drop, as noted above, is tied in part to a surge in pre-tariff import buying.
Anyway, that’s a lot to digest, and there’s even more out there, but the bottom line is the headline on this post. So, buckle up for FY26. [This post has been updated for clarity.]
posted by Rich Miller
Wednesday, Apr 30, 25 @ 12:25 pm
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Before jumping to any major conclusions, the next revision should be something to watch.
Comment by Steve Wednesday, Apr 30, 25 @ 12:39 pm
The April collections is going to be the next big thing.
Comment by Humpday Harry Wednesday, Apr 30, 25 @ 12:55 pm
GDP refresher …
GDP = Consumption + Investment + Government Spending + Net Exports
Higher imports (pulled forward caused by expected tariffs) skewed the 1st quarter data.
Comment by Donnie Elgin Wednesday, Apr 30, 25 @ 1:06 pm
=Since 1998, the U.S. has averaged real GDP growth of 2.4% per year, while Illinois has averaged growth of 1.4%.=
This has been across many different Presidents and Illinois Governors. Our political leaders need to really think hard about this multi decade trend and come up with some fresh answers to reverse it.
Comment by Mason County Wednesday, Apr 30, 25 @ 1:11 pm
===skewed the 1st quarter data===
Yep. That’s in the post. Twice.
Comment by Rich Miller Wednesday, Apr 30, 25 @ 1:14 pm
Everybody ready for downstate to blame Pritzker for Trump’s trade war?
Comment by Bob Wednesday, Apr 30, 25 @ 1:31 pm
There’s no way this trend will change without statewide housing reform. Population growth matters. And that won’t happen unless we stop letting each of Illinois’ 1,300 municipalities micromanage housing production and expect their neighbors to permit affordable homes.
Comment by Joseph M Wednesday, Apr 30, 25 @ 1:37 pm
===this trend will change without statewide housing reform===
Everybody has their own issue. And I’m not saying you’re wrong, but I doubt housing reform was a problem for the first decade or more of this trend, which dates to 1998.
Comment by Rich Miller Wednesday, Apr 30, 25 @ 1:44 pm
The rush to import products before tariffs took effect was huge. Besides the trade deficit, the economy was still okay. The biggest problem is uncertainty. And I think this post really ties into yesterday’s post about revenue enhancements. We probably need new revenue to maintain the current budget. How much? Well, there is uncertainty on that front as well. A lot more dominos need to fall before we really know where the economy in the state and country stand.
But at least we have a strong (and obviously extremely competent) federal government picking winners and losers in the free market. A republican’s dream, right? /s
Comment by Ducky LaMoore Wednesday, Apr 30, 25 @ 1:50 pm
Agree with Bob. Trump raised taxes (tariffs are taxes). He said he was going to do it.
Comment by Jerry Wednesday, Apr 30, 25 @ 1:51 pm
I can’t predict the future, but there are a lot of signs that a recession is coming.
Comment by Three Dimensional Checkers Wednesday, Apr 30, 25 @ 1:54 pm
Joseph-I think its safe to assume the several 100 thousand people who left had their own housing-Illinois needs to adopt policies which encourage growth- we have been doing the exact opposite for years
Comment by Sue Wednesday, Apr 30, 25 @ 2:04 pm
=Agree with Bob. Trump raised taxes (tariffs are taxes). He said he was going to do it.=
He also said he was going to lower prices day 1.
=Illinois needs to adopt policies which encourage growth- we have been doing the exact opposite for years=
And yet, Illinois GDP in terms of dollars is growing faster than our neighbors who are “competitive”. Competitive being code for low wages and no worker protections.
But sure.
Comment by JS Mill Wednesday, Apr 30, 25 @ 2:28 pm
===in terms of dollars===
C’mon. That’s not how it works. We start with a much larger base. We grow only a little percentage-wise, and it’s still larger than our neighbors dollar-wise.
Comment by Rich Miller Wednesday, Apr 30, 25 @ 2:31 pm
JS- it is uncontroverted that Illinois is the slowest growth State among our neighbors in the midwest- indeed- we are one of the slowest growth states in the entire country- every year the legislature enacts new laws imposing costs and burdens on employers- the connection is no coincidence
Comment by Sue Wednesday, Apr 30, 25 @ 2:48 pm
“Imports are a net negative for GDP”
That’s equivalent to saying buying things with the money we earn somehow has a negative impact on our earnings.
Imports are subtracted from GDP calculations because imports are included in Consumer Spending, Investments and Government Spending. They are removed because we’re calculating domestic production.
Comment by CapnCrunch Wednesday, Apr 30, 25 @ 2:51 pm
@Sue
I’m not here for hurting workers. If employers could employ responsibly, they wouldn’t need so many regulations.
Comment by Bob Wednesday, Apr 30, 25 @ 3:42 pm
Bob- ok i guess the employers in Wisconsin , Ohio, Michigan , Indiana and Iowa are all awful scrooges as all of those states are outpacing Illinois in every economic category
Comment by Sue Wednesday, Apr 30, 25 @ 4:06 pm
=ok i guess the employers in Wisconsin , Ohio, Michigan , Indiana and Iowa are all awful scrooges as all of those states are outpacing Illinois in every economic category=
Illinois has the 5th highest GDP in the US. With the exception of Ohio (7th) the other states you noted occupy slots 19-22. Despite its flaws Illinois is the economic powerhouse of the Midwest. Of course growth could be better, but aspiring to be Indiana or Missouri is foolhardy.
Comment by Pundent Wednesday, Apr 30, 25 @ 7:44 pm