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To: FJB who wrote (50185)	1/2/2011 7:24:30 AM
From: FJB	2 Recommendations Read Replies (2) \| Respond to of 95572

Full job recovery is years away By Francine Knowles Chicago Sun-Times Jan 2, 2011 4:00AM beaconnews.suntimes.com Think three years plus. That’s how long it’s expected to take for Illinois to regain jobs lost during the Great Recession under some of the brightest forecasts. But it could be years longer. The timelines are unwelcome news for the unemployed. While this year is expected to bring continued gradual improvements in job growth, the biggest gains aren’t forecast until 2013 and 2014 by economic research firms IHS Global Insight and Moody’s Analytics. Blame worried consumers and cautious employers for the forecasts of a still slow recovery the next two years, says Robert Tomarelli, associate economist at IHS Global Insight. “Consumer confidence has picked up a little bit of late, but the forecast is for it to be hesitant at best over the next couple of years through 2012,” he said. “It’s getting better, but it’s not at the levels it was before the recession.” “(Employers) are holding onto lots of cash,” he added. “Payrolls are expanding, however they are being very hesitant at the rate that they’re hiring people.” The state lost 371,300 jobs since the recession began in December 2007. It added 54,700 jobs through November in 2010, according to the Illinois Department of Employment Security. IHS Global Insight forecasts the state will add 58,600 jobs this year, 98,700 in 2012 and 131,200 in 2013. Some 133,300 jobs are forecast to be added in 2014, which would put the state past the number of jobs lost during the recession. Moody’s also expects 2014 to be the year for Illinois to fully recover the jobs lost. But a weaker outlook is held by Geoffrey Hewings, director of the University of Illinois Regional Economics Applications Laboratory. “Since 2000, we’ve only had two years where we’ve added more than 50,000 jobs,” one of which was last year, he noted. Far more than 50,000 jobs would have to be added each year for Illinois to regain all the jobs lost by 2014, which would buck the trend. It could take five to 15 years for a full recovery in the job market in Illinois, Hewings contends. He doesn’t expect job growth this year to go above 20,000. But he concurs that the Illinois recovery won’t accelerate until 2013 and 2014. “Companies are behaving rather like consumers... they are being very risk averse,” Hewings said. “They want to see a build up in their orders before they’re willing to commit to hiring more people. In many places what they’re doing is extending the hours of existing staff as a way to see whether this recovery is going to be sustained before they go to the expense of bringing on additional staff. I think what we’ll see is the volume of (business) activity is going to increase over the next two years, but the volume of job creation is going to lag way behind.” Moody’s senior economist Ryan Sweet expects Illinois to trail the nation in jobs recovery. He expects the U.S. to have regained all the jobs lost during the Great Recession by sometime in 2013, ahead of Illinois. “Illinois has housing, finance and state and local issues to work through before the labor market can really be off and running,” he said. “State and local finances are particularly problematic.” Historically the state has tended to enter recessions later than the nation and to be slower to recover, noted Hewings. “The one challenge for Illinois is whether our legislative leaders can convince the folks who own businesses in Illinois that this is a good place to grow their businesses,” he said. “If the private sector does not have confidence that Illinois is going to address its problems, it’s not going to invest. It’s not going to grow here. It’s not going to add jobs here.” He expects the Illinois unemployment rate to average between 9 and 10 percent this year. IHS Global Insight forecasts it will decline to an average 10 percent in 2011 from the 10.5 percent rate it averaged last year through November. By 2015, the rate is forecast to be down to an average 8.1 percent. Moody’s expects the rate to reach 5.1 percent in 2015, which would put it at pre-recession level, but forecasts it will rise this year to 10.9 percent as an improved economy prompts more people to look for work. But some industries aren’t ever expected to see a return to pre-recession job levels. They include manufacturing, which has lost 105,000 jobs since the recession began; and construction, which was enjoying a boom only a few years ago but which lost more than 67,000. For job seekers education and training will be critical, said IDES research economist Mitch Daniels. “The requirement that you have completed a definable education with a set of technical skills is more important after the Great Recession than it was before,” Daniels said. “Having picked up from your education and training the ‘how to’ part of learning, so that you can keep your skills up to date is indefinably critical. Even a low-skilled job will require some basic computer skills, communication skills, general worker readiness skills, and without those you’ll be unemployed.”