Chicago area's record-low May unemployment rate masks slow job creation
By Alexia Elejalde-Ruiz
The unemployment rate in the Chicago-Naperville-Arlington Heights metro division fell to 4.1 percent in May, down from 5.4 percent a year before. (E. Jason Wambsgans / Chicago Tribune)
The Chicago metro area posted another record-low unemployment rate in May, but experts caution that local job creation remains subpar compared with the national average and the seeming improvement in unemployment could reflect an exodus of workers.
The unemployment rate in the Chicago-Naperville-Arlington Heights metro division fell to 4.1 percent in May, down from 5.4 percent a year before and the lowest May unemployment rate since tracking started in 1976, according to not-seasonally adjusted numbers released Thursday by the Illinois Department of Employment Security. The prior month, the Chicago metro area hit a record-low April unemployment rate of 4.2 percent.
But during the same time, the Chicago metro area's labor force — which includes everyone working or looking for work — shrank by about 70,000, which happens when people retire, go back to school, move away or get so frustrated with the job hunt that they stop looking.
The decline in the labor force could be artificially driving down the unemployment rate by reducing the number of unemployed people but not adding the ranks of the employed, said Kurt Rankin, a regional economist at PNC Financial Services. He added that not-seasonally adjusted data, which means that the numbers don't take into account seasonal patterns like holidays and weather and can only be compared year-to-year and not month-to-month, tends to be volatile.
One clue that Chicago may not be doing as well as its low unemployment rate makes it seem is the pace of its job growth. The Chicago metro area added 24,000 jobs from May 2016 to May 2017, a growth rate of 0.7 percent, which is less than the national average of 1.6 percent. Historically, Chicago has kept up with the average, Rankin said.
"Chicago is performing, but at low potential," Rankin said. He attributes the growth gap to manufacturing job losses and flat hiring in leisure and hospitality.
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The industry sectors reporting the greatest job gains in the Chicago metro area were financial activities, educational-health services and professional-business services. The largest employment declines were in retail trade, which shed 3,900 jobs, manufacturing and wholesale trade.
Illinois unemployment rate hits 4.6 percent in May, lowest in over 10 years
Illinois' unemployment rate has fallen for the fourth consecutive months, hitting 4.6 percent in May.
All but one of the state's 14 metro areas posted unemployment declines in May compared with a year before. Only Rockford posted an increase, to 6.1 percent from 5.8 percent over the year, but officials there have attributed that to temporary layoffs stemming from a revamp of a Fiat Chrysler plant and related adjustments in suppliers.
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Nine metro areas gained jobs over the year, with the greatest growth rate in Kankakee, at 2.7 percent, the Lake/Kenosha metro area and Springfield. Five metro areas reported job declines: Danville, Rockford, Decatur, Elgin and Carbondale.
"While the job gains in the northeastern corner of the state show some signs of recovery, the rate of job growth remains well below the national average," IDES Director Jeff Mays said in a news release. "There are pockets of modest job growth downstate, but we've yet to see any sustainable trends."
aelejalderuiz@chicagotribune.com
Twitter @alexiaer
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