Illinois’ February unemployment rate 5th highest in U.S.
Unemployment in Illinois remains stubbornly high. February’s unemployment rate was the fifth highest in the nation at 4.8%.
Illinois’ February unemployment rate of 4.8% was fifth highest in the U.S. in February, behind only California, Nevada, Michigan and Kentucky.
That unemployment rate translated into 321,000 Illinoisans looking for work, according to the U.S. Bureau of Labor Statistics. Illinois’ 4.8% unemployment rate continued to exceed the national average of 4.1% in February.
Illinois saw a job growth of 19,100 during the past year, compared to February 2024. The growth rate for Illinois was only 0.31%, which ranked the state 42nd in the nation. This lagged significantly behind the U.S. average of 1.21% in that same timespan.
The state’s labor market shows signs of tightening competition for available positions. Illinois had 277,000 job openings in January 2025, creating an unemployed-to-job-opening ratio of 1.2. This means roughly 1.2 unemployed workers are competing for each available job, ranking Illinois 2nd highest among neighboring states and 5th highest nationally for this metric.
By comparison, states such as Minnesota (0.5) and Vermont (0.4) had much less competition for open positions.
Illinois saw the highest growth rates in local government, adding 15,000 jobs. Other sectors with strong growth rates were private education and health services with 20,700 new jobs and information with 1,200 new jobs. The professional and business sector saw the largest net decline during the 12-month period, reporting 13,900 fewer positions. The manufacturing sector lost 7,300 positions and the wholesale trade sector also saw a decline of 5,900 jobs.
Illinois saw gains in 7 out of 11 industries, not including government.
Illinois ranks in the middle among neighbors. Michigan had the highest growth rate at 0.77%, while Indiana (0.09%) and Iowa (-0.46%) lost jobs.
Illinois’ job recovery rate since the pandemic has been notably slow, ranking 47th in the nation, with only 9,200 more jobs than were available in January 2020. This translated into a 0.15% increase. This ranks last among neighboring states in post-pandemic recovery.
The primary culprit in Illinois’ slow economic growth and high unemployment is a unfriendly business environment because of high taxes resulting from a constantly mismanaged budget.
Illinois’ state and local tax burden is the highest in the Midwest. The state also levies the second-highest state corporate income tax in the nation and the state’s tax code is among the least friendly for businesses in the Midwest.
Despite this, the state continues to overspend by adding $15 billion to its general funds budget since 2019. Illinois continues to foster an environment that makes it harder for Illinoisans to find work and reduces wage growth prospects for those who are employed.
Illinois has many advantages such as its diverse economy, central location and strong infrastructure. To take advantage of this, Illinois must focus on strengthening its fiscal position, removing regulatory burdens, and providing real tax relief both to workers who are already finding it difficult to remain and to job creators who are desperately trying to stay.