Illinois continues to be one of the slowest growing economies in the nation, ranking 46th in post-pandemic job recovery and adding just 20,300 jobs in the past year. Unemployment remained above the national average.
Illinois’ unemployment rate was stable in July at 4.6%, meaning 301,000 Illinoisans were actively looking for work, according to the U.S. Bureau of Labor Statistics.
Illinois’ unemployment rate ranked 11th highest in the nation, remaining above the national average of 4.2% in July. The rate improved from a year earlier, when it was 5.1%.
Illinois saw a job growth of 20,300 during the past year, compared to July 2024. The growth rate for Illinois was only 0.33%, which ranked the state 45th in the nation.
During those 12 months, Illinois saw the highest growth rates in the information sector, adding 3,900 jobs for a 4.36% increase. Other sectors with strong growth rates were private education and health services with 17,400 new jobs and state government with 2,200 new jobs.
The federal government sector saw the largest percentage decline during the 12-month period, reporting 2.6% fewer positions than a year earlier. The professional and business services sector had the largest net decline at 11,000 positions. Manufacturing also saw a sharp decline of 5,400 jobs.
Excluding government, Illinois had modest gains in six of 11 industries.
Illinois ranked second-to-last for its job growth rate among neighboring states from July 2024 to July 2025. Missouri reported the strongest growth at 1.09% while Iowa was the only state with a loss at -0.23%. Illinois only outpaced growth of neighboring states in two of 11 industries.
Illinois’ pandemic job recovery rate has continued to lag most states, ranking 46th in the nation. It’s added 24,700 jobs since January 2020, a 0.4% increase. This ranks second-to-last among neighboring states in post-pandemic recovery.
The primary culprit in the state’s slow economic growth and high unemployment is an unfriendly business environment thanks to high taxes resulting from a constantly mismanaged budget.
Illinois’ state and local tax burden is the highest in the nation. The state also levies the third-highest state corporate income tax in the nation and the state’s tax code is among the least friendly for businesses in the Midwest.
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.