Jun. 26--DECATUR -- The Decatur area unemployment rate climbed in May to its highest level since 1987.

The rate in May, according to Illinois Department of Employment Security statistics released Thursday, was 10 percent, the second time this year monthly figures have reached double digits and 3.4 percent higher than the same time last year.

The rate in April was 9.8 percent. In May, the manufacturing sector lost 1,300 jobs over the year as the Decatur area lost 2,000 jobs total.

"There is little doubt that the national economy, and in particular manufacturing, has certainly had a very negative effect on the Decatur area," said Ron Payne, a labor market analyst with the department. "It's not just one company in Decatur."

The manufacturing, professional and business services, transportation, warehousing and utilities, retail, financial activities and leisure and hospitality sectors all experienced drops, Payne said.

"All of those sectors are directly related to the economy and economic conditions," Payne said. "That spending is a trickle-down effect. When the workers don't have the money to spend, it affects all the other industries."

Companies in the Decatur area are dependent on what happens in the global economy, said Craig Coil, president of the Economic Development Corporation of Decatur and Macon County.

"It's troubling not only from a Decatur-Macon County perspective that we continue to lose these kinds of jobs, but we're losing them statewide," Coil said. "We're losing them in numbers I don't think we've seen since the early '80s."

Some companies have shown signs of improvement, including Mueller Water Products Inc., which has called back more than 60 laid-off workers in the last two months.

"I think that's encouraging just from the standpoint that it shows there's starting to be demand for product that's infrastructure-based," Coil said. "That will hopefully trickle down to the other sectors as well. We hope that's one of the preliminary signs things are starting to turn."

The unemployment numbers elsewhere aren't giving local officials many signs of encouragement. Rockford continues to suffer the most, with a 13.4 percent May unemployment rate, due mainly to manufacturing sector losses, Payne said.

In addition, the Chicago area lost 185,900 jobs.

"When you see job losses in the Chicago metro area totaling nearly 200,000 people, that even impacts us," Coil said. "That indicates products that are distributed out of the Chicago area aren't being purchased, and that trickles down the manufacturing chain to us. Businesses need to start buying product so we can get people back to work."

The release of the local numbers comes days after the White House changed its prediction to state nationwide unemployment could reach 10 percent in the next few months. President Obama had previously said double digits could be hit by the end of the year. The May unemployment rate nationally reached a 25-year high of 9.4 percent.

The Illinois rate hit 10.1 percent in May, leaving 671,400 jobless, the most since June 1983. Nationally, 14.5 million people are unemployed.

Many analysts are predicting even if the economy recovers by the end of the summer, unemployment is expected to remain high into next year.

"The economy continues to tighten, just not at the frenetic pace we experienced last year," IDES director Maureen O'Donnell said. "That contraction continues to pressure local economies and potentially means further increases in the unemployment rate."

clusvardi@herald-review.com|421-7972

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