IGPA economists J. Fred Giertz and Geoffrey Hewings comment on news that the unemployment rate in Illinois reached 9.1 percent, its highest in more than 23 years. Giertz (left) compiles the monthly University of Illinois Flash Index and Hewings directs the Regional Economics Applications Laboratory.

FRED GIERTZ:
"The recent increase in the unemployment rate is unfortunate, but not unexpected. The unemployment rate is what is known as a lagging indicator as compared to a leading or coincident indicator. It follows what is happening in the economy, but does not predict the future. There are some modestly encouraging signs now that the decline in the economy is moderating. This does not mean the recession is over, however. The economy will likely to continue to slow through much of the rest of the year, albeit at a slower rate. This means that unemployment will likely continue to climb, probably reaching the 10 per cent level in Illinois. We will have to wait until 2010 for a decline in the unemployment rate."

GEOFFREY HEWINGS:
"Illinois has traditionally entered recessions later than the U.S. as a whole and the recent spike in the unemployment rate indicates that the full force of the downturn is now very apparent in the Midwest. Of equal concern is the degree to which this statistic captures the full extent of those who are either underemployed (they have a less than a full-time job or are employed in occupations that require less skills) or have left the labor market and thus are not counted in the official unemployment statistics. The Regional Economic Applications Laboratory's estimate is that the unemployment rate in Illinois may be closer to 11% already if these individuals are included. Last month, REAL forecast that employment would decline by more than 300,000 over the next 12 months; the increase in the unemployment rate does not provide much motivation for revising this number downward."