Illinois unemployment up sharply to 9.9 percent

CHAMPAIGN — Illinois’ unemployment rate shot up almost half a percentage point in August to 9.9 percent. It was a fourth straight month of diminishing job prospects that state officials blame on weak consumer confidence and the struggles of the national economy.

Even the state’s manufacturing sector, which had been a bright spot even as other types of employers shed jobs the past few months, cut employment in August.

Illinois’ unemployment rate surged up from 9.5 percent in July but has been increasing since it was at 8.7 percent in May, according to the Illinois Department of Employment Security. The national jobless rate held steady in August at 9.1 percent.

“We know that consumer confidence drives our economy, and that confidence has been shaken across our country,” Department of Employment Security spokesman Greg Rivara said. “So it is a challenge for any state to sustain positive momentum while the national economy remains so uncertain.”

Nationally, pessimism about the economy increased sharply in August, according to the Conference Board, the private group that surveys Americans every month about consumer confidence. The board’s monthly index fell more than 14 percent.

The number of unemployed people in Illinois actively looking for work increased in August by 25,400 to 653,000, the department said. That’s an increase of 4 percent.

The biggest job losses in August were the 2,800 jobs cut by government employers and the decrease in manufacturing employment by 1,000 jobs.

The government jobs lost were almost entirely at the local level, Rivara said.

Local governments continue to struggle with tight finances, driven down both by decreasing tax revenues and the state’s troubles finances. Illinois’ government is months behind on payments to local governments and institutions around the state because of its ongoing multibillion-dollar budget deficit.

In all, Illinois has shed about 12,000 government jobs since May, down to 843,300, or 1.4 percent. Rivara wasn’t sure how many of those jobs may have belonged school employees who don’t work over the summer.

Manufacturing had been a bright spot as unemployment inched up over the summer, with Illinois-based companies such as Caterpillar and Deere continuing to prosper on strong exports.

Food production and auto manufacturing have both been strong, too, said Jim Nelson, vice president of the Illinois Manufacturers Association. But even some strong categories of manufacturers have begun to see sales flatten.

“When we have a net loss of a thousand over the month, there’s more cause for concern than there is optimism,” he said.

Gov. Pat Quinn plans to leave Friday on a trade mission to China intended to boost Illinois export prospects, for raw agricultural goods such as soybeans but also other sectors of the state’s economy.

Talking about that trip Friday in Chicago, the governor said the state’s economy and the confidence of its businesses and its residents has been battered by the uncertainty created by events in Washington such as the debate over raising the nation’s debt ceiling but also economic problems in European countries such as Greece.

“I think everyone knows that it was a rough summer,” he said. “It has been a turbulent year for the world economy and all of us are affected by it.”

Illinois’ summer job losses are translating into tough times for people already struggling, said Jason Greenly, a supervisor at The TIME Center, a homeless shelter and soup kitchen in Champaign.

Demands on the center’s soup kitchen have increased the past few months, he said.

“The curve is definitely going upwards,” he said. “Of those who are able to work, the challenge is there’s just less work to be had.”

Among sectors that increased employment in August, according to the Department of Employment Security, the state’s professional and businesses services companies, which include banks, added 2,200 jobs. Construction employers added 1,000 jobs.