Originally Posted Online: March 21, 2013, 12:30 pm
Last Updated: March 22, 2013, 9:37 am
Illinois unemployment spikes as more join job search
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CHAMPAIGN, Ill. (AP) — Illinois' unemployment rate increased for a second straight month in February, spiking to 9.5 percent, the state Department of Employment Security said Thursday.
That's the highest unemployment rate seen in the state since 2011 and gives Illinois one of the highest unemployment rates in the country at a time when the national jobs picture is improving. Nationwide unemployment fell last month to 7.7 percent.
State officials blame the increase in part on increasing numbers of people who've been spurred to resume job searches by positive economic news. Even with the state adding a net 12,400 jobs for the month, the number of unemployed people in Illinois — limited in the state's monthly report to those without a job who are actively looking for work — the number of unemployed people still rose by 34,900 to 629,400.
"There's no doubt that some of this is tied directly to people who previously did not believe that they would be able to find work so they chose not to look for work," department spokesman Greg Rivara said.
But private-sector experts said it's far from good news.
"The last two months have produced some sobering news for the Illinois job market," said John Challenger, CEO of Chicago-based outplacement firm Challenger Gray & Christmas Inc. "It seems to be running counter to the more positive news nationally, and should raise concerns about the business environment, the labor environment here."
February unemployment rates aren't available for every state yet, but based on January's numbers Illinois would be among the worst. Only five states had unemployment rates of 9.5 percent or higher, according to the U.S. Bureau of Labor Statistics: California, Nevada, New Jersey, North Carolina and Rhode Island.
Illinois last had unemployment rates at 9.5 percent or higher in the summer of 2011.
Illinois' relatively strong manufacturing sector — led by Illinois-based companies such as Caterpillar Inc., Deere & Company and Kraft Foods — have led a sometimes uneven recovery in the state.
Gov. Pat Quinn and other state officials regularly point out that the state's manufacturers have grown by almost 40,000 jobs over the past three years.
But some big-name manufacturers have made clear over the past few months that they're uneasy about the months ahead. Caterpillar, for one, has warned that the months ahead could be difficult and is using short-term layoffs to lower production and work through inventories.
Manufacturers continued to add to job growth in February, albeit by putting temporary employees to work.
The biggest gain for the month was in the professional and business services sector, which added a net 7,900 jobs. That sector includes companies that provide temporary workers, and a lot of those reflected in the February report were working in manufacturing, Rivara said.
That's a sure sign, Challenger said, that many of those manufacturers are still unsure about where the state's economy is headed.
"Cautious employers add temporary workers first," he said.
Construction hiring was up by 2,500 jobs, though the 187,400 people working in the industry last month is still more than 7,000 fewer than a year earlier.
That could be because the state's weak residential real estate market seems to be improving.
Home sales were up across the state by 16.2 percent in February compared with a year earlier and the median price increased by 5.1 percent, the Illinois Association of Realtors said in a report released Thursday.
But most other employment sectors were essentially flat. And employers continue to worry about the state government's unsteady fiscal situation, Challenger said.
Lawmakers this week are working on plans to address the state's pensions, which are underfunded by almost $10 billion.
A spokeswoman for Quinn did not immediately respond to a request for comment.