The national unemployment rate rose to 7.2 percent in December of last year, according to the Bureau of Labor Statistics, but Peoria may be faring better than the average town.
“Peoria’s unemployment rate is 6.2 percent, which is not bad right now,” economics professor Kevin O’Brien said. “To put that in context, Rockford is currently at 10 percent and Danville is at 9.7 [percent].”
He said the only town close to Peoria with a lower unemployment rate is Bloomington-Normal.
O’Brien also said students who are looking for jobs will have better luck staying in Peoria.
Another area of Peoria’s economy that has not been as hard hit as the rest of the state and the country is housing, O’Brien said.
“Our housing market is doing much better than the rest of the United States,” he said. “Peoria just never had a housing bubble to burst.”
The number of foreclosed homes reached 2.3 million nationally last year, an 81 percent increase from 2007, according to azcentral.com.
O’Brien said some of the causes of the current recession such as people buying homes they cannot afford are cultural and psychological.
O’Brien also said manufacturing is of particular vulnerability in tough economic times.
“Manufacturing has been hit hard in Peoria, just like the rest of the country,” O’Brien. “Caterpillar is going through another round of layoffs.”
The recession is affecting other sectors of the local economy as well, O’Brien said.
“There is a lot of uncertainty, so consumers and companies are putting off spending and that makes the economy recede even further,” he said.
This worries students, such as junior early childhood major Sarah Potter.
“I am most concerned about the availability of jobs,” she said. “I am going out and trying to get a job, so I really want employers to be hiring.”
Potter said she thinks consumer culture is largely to blame for the current conditions in Peoria and elsewhere.
“I think here in Peoria we are just as bad with our money as everyone else,” she said.
On Dec. 16, 2008, the Federal Reserve lowered interest rates to a quarter of a percent, the lowest rate ever according to news.bbc.com, in an attempt to curb the effects of the recession.
“That was the right move to help us out of this recession,” O’Brien said. “It gets people to borrow more and that will get the economy moving.”
O’Brien said he hopes predictions of the end of the recession are correct.
“The conventional wisdom is that half way through 2009 the economy should start to pick up, and I presume Peoria would follow that pattern,” he said.
Others like junior marketing major Natasha Guedesse have a less optimistic view.
“I think it could take up to three years for the economy to recover,” she said.
O’Brien made it clear what he thought should happen after the economy recovers to prevent another recession.
“There must be some financial system reforms and regulation,” he said.