Illinois loses jobs in January, metro areas lag U.S. job growth
Illinois’ job market continued to struggle in January as the national economy grew. The job troubles were seen in eight of Illinois’ 13 metropolitan areas, with Champaign-Urbana hit the hardest.
Illinois job growth continues to lag as the state lost 1,100 jobs across its metropolitan areas in January while the U.S. economy added 125,000 jobs.
The state’s employment varied greatly across regions, with the Davenport metro area showing the largest percentage increase in non-farm employment. It grew 0.39% from December to January, adding 700 jobs. Bloomington, Rockford and Chicago also saw notable increases in jobs.
The biggest drop in jobs came from Champaign-Urbana, which lost 4,800 jobs – a nearly 4 percent point decline. Kankakee also lost a large percentage of jobs at 2.29%. St. Louis saw a decline of 4,000 jobs, but most of that area is outside Illinois.
After months of sluggish job growth, the Chicago metro area saw an increase of 5,100 jobs. That 0.13% rate of growth ranked fourth among Illinois’ 13 metro areas from December to January.
Most Illinois metro areas face unemployment rates above the national average of 4.4%. Kankakee saw the highest rate at 6.3%, followed by Decatur at 6% and Rockford at 5.8%. Only a few regions have unemployment rates below the national average, including Bloomington and Champaign-Urbana at 4% and Cape Girardeau at 3.8%.
The Chicago metro saw an unemployment figure of 5%. This ranked Chicago fifth for its unemployment rate among Illinois metros and tied for fifth among the 35 largest metros in the nation.
Eight Illinois metro areas added jobs between January 2024 and January 2025. Elgin saw the greatest growth at 1.84%.
Champaign-Urbana experienced the steepest decline at 2.02%
The Chicago-Naperville-Arlington Heights metro division has gained 24,600 jobs during the 12-month period, an increase of 0.65%. While stronger than the state, which was 0.59%, it was far slower than the national average of 1.28% during the same time.
The Chicago-Naperville-Arlington Heights area showed mixed results across industries during the past year. While sectors such as government, private education and health saw job gains, other sectors such as professional and business services saw big drops for a reduction of 14,200 jobs. There were also declines in transportation, retail, manufacturing and wholesale trade. These shifts underscore the need for strategic interventions to support struggling sectors.
The Illinois job market continues to face issues. Slow job growth and high unemployment mark a struggling state economy. A large exodus of skilled workers does not help.
High tax rates are the top reason the state continues to hemorrhage skilled workers. The Illinois Policy Institute’s Lincoln Poll in 2023 substantiated that reason.
Illinois’ state and local tax burden is the highest in the Midwest. Illinois 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.
Recent income tax hikes have already fostered an environment in Illinois that makes it harder for Illinoisans to find work and reduces wage growth prospects for those who are employed. Rising income and property taxes have made housing less affordable in Illinois and reduced returns from investing in a house relative to other states.
Illinois has many advantages including its central location and diverse economy, but the state continues to underperform because of poor policies and economic mismanagement. To grow, the state 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.