The Illinois Policy Institute announced that Illinois experienced a net loss of 1,700 jobs in 2025, in contrast with a national gain of 584,000 jobs, highlighting the state’s slower economic growth and persistent challenges.
According to the Illinois Policy Institute, the state’s unemployment rate stood at 4.6 percent in December, which is higher than the national average of 4.4 percent and ranks as the 11th highest among states. Illinois was unique in its region for losing jobs while the Midwest collectively added 110,400 positions. The report attributes declines in sectors such as federal government, retail trade, and manufacturing to high taxes and burdensome regulations that hinder business growth.
WalletHub’s study for 2025 ranked Illinois seventh highest in overall state and local tax burden, with residents paying 10.22 percent of personal income in taxes. This includes a property tax burden of 3.81 percent, ranking eighth nationally, along with sales and excise taxes at 3.78 percent. These high taxes contribute to economic pressures by reducing affordability for families and businesses, correlating with observed job losses and slower recovery within the state.
Moody’s Analytics has indicated that Illinois is the largest state at high risk of recession or already experiencing one based on state business cycle data. Among the ten most-populated states, only Illinois and Georgia fall into this high-risk category. This assessment reflects national economic variations where Illinois faces challenges from high pension costs, outmigration, and slower growth compared to its peers.
The Illinois Policy Institute is a nonprofit research organization founded in 2002 that promotes free-market solutions to policy challenges in Illinois, focusing on areas such as taxes, pensions, and government reform. It provides data-driven analysis advocating for fiscal responsibility and economic growth while engaging in public education and policy recommendations to address state and local issues.
