Illinois unemployment rate hits 7.3%

By James P. Miller | Tribune staff reporter

2:07 PM CST, November 20, 2008

Unemployment in Illinois jumped higher last month -- and continued to track significantly above the nationwide rate -- as the state's construction sector lost jobs at an accelerating pace, according to statewide data released Thursday afternoon.

The state's jobless rate surged to 7.3 percent in October from September's 6.9 percent reading, the Illinois Department of Employment Security said.

Because the state's population is growing, Illinois must typically generate thousands of new jobs monthly just to absorbe the growing labor pool and keep the unemployment fromrising. But October marked the fifth consecutive month in which the number of jobholders fell.

Employment dropped by a substantial 11,700 from September, to 5,958,400, IDES said.

Nationwide, unemployment surged to a 14-year high of 6.5 percent in October, according to Labor Department data released earlier this month. And with the U.S. economy now sinking deeper into what is widely expected to be the worst recession in 25 years, many experts think the national jobless rate will exceed 8 percent during 2009.

With its large manufacturing, commercial and financial bases, Illinois's economy feels the impact of the negative factors that have been battering the national job market: slowing demand for manufactured goods, a punishing drop in residential construction, disruptions linked to the tight credit markets, slowing export activity and weakening retail sales.

The state's construction sector showed the most painful drop, shedding 4,100 jobs and reducting construction employment to 254,500. Over the past twelve months, construction has lost a total of 15,200 jobs in the state -- and 7,400 of those jobs disappeared in the past two months.

Government employment also declined, with the sector losing 2,700 jobs to a new total of 850,200. Financial employment dropped 2,200 jobs, to 394,000, as banking, insurance and securities workers felt the impact of the credit market's ongoing woes.

"Although Illinois has a diverse economy, the national economic slowdown has had a negative effect on Illinois unemployent and thus we need federal government assistance with an investment in infrastructure and additional stimulus to help create jobs," said IDES director Maureen O'Donnell.