Bucking overwhelming evidence that the nation`s economy is in trouble, Illinois` unemployment rate fell 1.3 percentage points to 5.9 percent last month as the U.S. rate remained at 5.7 percent.
Nationally, the unemployment figures and the government`s index of leading indicators, both released Friday, painted a gloomy portrait of an economy apparently shrinking, quite unlike the expansion days of the last decade.
”The evidence that the economy is in a recession is ambiguous. Business activity is heading into a steep slide in the fourth quarter,” said Jerry Jasinowski, president of the National Association of Manufacturers.
The government`s index of leading indicators, a key tool for predicting conditions in six to nine months, dropped for a second straight month in September, falling by 0.8 percent. It declined 1.2 percent in August and was flat in July. Nine of 11 indicators fell in September.
As for the unexpected dip in Illinois unemployment, Diane Swonk, an economist at First National Bank of Chicago, called it ”a reprieve” and said the state, along with the rest of the Midwest, soon will face higher unemployment levels.
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With hefty layoffs looming by the U.S. automakers and manufacturers likely to trim back as consumers spend less, she said unemployment in the region of Illinois, Michigan, Indiana, Ohio and Wisconsin will go from 6.2 to 7 percent by the end of year.
Republican candidate for governor Jim Edgar saw the unemployment rebound as proof Illinois is not in as bad shape economically as is seen by his Democratic opponent, Neil Hartigan, who he said is making ”gloom and doom predictions” for Illinois.
Hartigan, who has said that Illinois is in a recession and many parts are in a depression, called Edgar ”out of touch with reality, and so are those numbers.
”I`ve been in every section of this state, and we`re in trouble, serious trouble. Those numbers are not accurate,” Hartigan said.
”I find it pretty interesting that the day Mr. Edgar was unwilling to have the president of the United States seen with him campaigning is the day these miraculous pre-election statistics come out,” Hartigan added, referring to President Bush`s canceled campaign appearance with Edgar.
”If the news was that good, Mr. Bush would be in here announcing it with Mr. Edgar at his side,” Hartigan said.
To be sure, Illinois has fared better than most states. It was one of two of the 11 biggest states to show a decline in its jobless rate last month. The other was Texas, where the rate fell to 5.7 percent from 6.3 percent.
Michigan, which had tied Illinois in September for the highest jobless rate among the 11 major industrial states, remained the leader last month as its rate inched up to 7.4 percent. State officials there remained upbeat, however.
”As we look at history, we are continually surprised at what seems to be the resilience of the economy,” said Von Logan, research director of Michigan`s Employment Security Commission.
Illinois` unemployment last month was helped as employment in public schools, colleges and universities grew by 23,000, said Sally Jackson, director of the Illinois Department of Employment Security.
At the same time, the construction industry did not suffer the massive losses seen elsewhere, officials added. There were 358,000 people out of work in October in Illinois.
Though the nation`s unemployment rate did not grow, economists were hardly encouraged. They said the rate held steady because the U.S. work force, those employed plus those actively seeking work, declined.
”The October job figures provide further evidence of deterioration in the labor market,” Janet Norwood, commissioner of the Bureau of Labor Statistics told the Congressional Joint Economic Committee. ”Even the usually robust service sector has lost much of its vitality during this period.”
Another 60,000 people lost manufacturing jobs last month. Since peaking in January 1989, the goods-producing sector has lost 580,000 jobs.
Construction employment, also sliding since spring, dropped by 80,000, boosting the building industry`s unemployment rate to 13.2 percent. One out of every eight construction workers now is jobless.
Retail trade, one of the big industries in the service sector, also continued to decline, shedding 50,000 jobs last month.
The sharp fall in retail jobs was offset, however, by gains in other service-sector industries.