Recession threatens virtually every segment of local economy

Crain's:

Recession threatens to shake almost every segment of Chicago's economy, including areas that cushioned the blow of the past two downturns.

"This one is going to be a full-fledged consumer recession," says Paul Kasriel, director of economic research for Chicago-based Northern Trust Corp. "With corporate-led recessions, you have job losses. But now you have households with record debt, and liquidity at near-record lows and net worth falling — and they're losing their jobs."

That's a daunting challenge for Sears Holdings Corp., Motorola Inc., United Airlines and other local companies. Financial services and some government employers, pockets of safety in past recessions, are shedding jobs.

Chicago will see a net loss of about 43,000 jobs by the end of 2009, pushing up unemployment to a short-term peak of 8.4%, predicts Sophia Koropeckyj, an economist with Moody's Economy.com. Unemployment in Illinois averaged 7.1% in the third quarter, the highest in 15 years, compared with 6.0% nationwide. The job market, which lags overall economic output, won't start to recover until 2010, economists say.

Construction companies and financial firms are among those likely to suffer most, Ms. Koropeckyj predicts.

This article is worth your time if you want to look at the local economic situation.