ILLINOIS, USA — With the U.S. economy still strained from inflation, economists are worried that Illinois may be one of the worst prepared states to handle another recession.
The claim comes from the Illinois Policy group, which researches Illinois policies and how they affect people in the state. Its research includes a similar claim by Moody's Analytics, which studies financial trends.
The main concern comes from the state's budget.
Researches said the state of Illinois has relied heavily on federal pandemic relief money, which will be much harder to come by in the future.
They also said while the state is continuing to build its surplus or 'rainy day' fund, data from the Pew Charitable Trusts suggests if Illinois had to run solely on this fund, the money would only last for about 12 days. For comparison, Iowa would have close to 90 days.
"If we do go into some type of recession in 2023, that's going to mean there's there's less tax dollars, there's less tax revenues, and there's less economic activity - and so the state of Illinois may find itself in some type of a financial pain," local financial advisor Mark Grywacheski from the Quad Cities Investment Group said.
Experts also raised concern about inflation and unemployment.
While inflation is coming down from a June 2022 peak, Mark said it could take until late 2024 for the inflation rate to decrease to 2%, which economists consider a healthy amount.
Additionally, Illinois is still struggling with high unemployment. Data from the U.S. Bureau of Labor Statistics says that Illinois has the second highest unemployment rate in the U.S.
Mark said based on the broad consensus of Wall Street analysts, it's likely that the U.S. could see a recession in the later half of 2023.
He said because of Illinois' low rainy-day fund, a recession could mean substantially higher taxes across the board.
His advice: reconsider any large purchases that aren't absolutely necessary, and practice some 'cash management.'
Really keep track of your expenses - go through your utility bills, your credit card statements, keep track of your your cash expenses," Mark said. "You'd be surprised on where your money goes and how much you're spending on uncertain items each month."
Watch more news, weather and sports on News 8's YouTube channel