CHICAGO -- January data from the Illinois Department of Employment Security shows that unemployment is declining, but those who are jobless are having a tougher time finding work.
Last month, the state jobless rate hit its lowest level since February 2002, dropping from a seasonally adjusted rate of 6.7 percent in December 2003 to 6.2 percent in January. The number of unemployed also declined by 23,900, also the lowest level since February 2002.
Although new claims continue to decline, IDES Director Brenda Russell tempered the good news by pointing out an area of concern.
January statistics showed improvement in several areas," Russell stated. "The numbers of initial and continued claims for jobless benefits have been in a downward trend for four consecutive months. "Still, the average duration of unemployment was up from last year, and one out of every five of the unemployed was out of work at least six months."
The improved economy is starting to create more jobs, but the effect has been slow to materialize in the Midwest. The state's unemployment rate for last month is still well above the national rate of 5.6 percent. Metropolitan markets with more diverse economic bases have been able to add jobs at a much faster pace, while the loss of manufacturing jobs has hurt many smaller communities in the nation's heartland that have had a heavier dependence on manufacturing.
Tom Austin, IDES labor market analyst in Rockford, said manufacturing in the region has showed signs of picking up, but many companies still seem to be in a wait-and-see mode.
"Manufacturers nationally are looking for consistent growth trends, establishing demand, before they'll go out on a limb and add workers," Austin said. "Right now most are content to produce more with fewer workers."
In any kind of economic recovery, improvement in the jobs picture are usually not visible at the front-end of an upturn. Companies will closely watch the reports that demonstrate a sustained increase in demand before adding workers. One report they watch closely is the demand for durable goods. Cyclical retail and manufacturing stocks are traditionally among the first to benefit at the beginning of an economic turnaround and that again has been the case.
Illinois lost another 20,600 manufacturing jobs last month, a 2.8 percent drop. The largest number of casualties were in computer and electronics production, closely followed by electrical equipment. Substantial declines were also recorded in transportation equipment, machinery and fabricated metal.
Of the 12 "supersectors" regularly tracked by IDES, only three experienced job gains. Leisure and hospitality reported the biggest gain, creating 10,400 new jobs - a 2.2 percent increase. Education and health jobs jumped by 9,000 jobs, given a boost from increased need for social services and educational assistance for the jobless.
Although insurance jobs realized a slight drop, the financial activities sector produced 1,700 additional jobs. Credit-related services, in particular, spiked in January.
Unemployment figures for the northern Illinois region are expected next week.
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