Chicago Economy: Cost of Living, Jobs, and Industries

The Chicago metro area — formally Chicago-Naperville-Elgin, which stretches across parts of Illinois, Indiana, and Wisconsin — is the third-largest metro economy in the United States. It is the financial and logistical hub of the Midwest, home to major futures and options exchanges, and one of the most-connected freight and air-travel hubs in the world.

This is a plain-English tour of how the Chicago metro economy works. For the state-level picture, see Illinois Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the Chicago metro economy?

For example, recent metro GDP for Chicago-Naperville-Elgin has run around $830 billion, according to the Bureau of Economic Analysis. Metro population is roughly 9.4 million, per the U.S. Census Bureau. The Chicago metro alone accounts for the majority of Illinois's population and an even larger share of the state's economic output.

The biggest industries

A few sectors do most of the work in the Chicago metro economy:

• Finance and insurance — Chicago is a world center for futures and options trading through the CME Group, plus a large banking, asset management, and insurance sector.
• Manufacturing — the metro remains a top U.S. center for machinery, food processing, fabricated metals, and chemicals.
• Transportation and logistics — Chicago is the rail hub of North America, and O'Hare is one of the busiest airports in the world. Rail, truck, and air freight all converge here.
• Professional services — major law firms, consulting firms, and corporate headquarters cluster downtown and in the western suburbs.
• Healthcare and education — Northwestern, University of Chicago, Rush, and Advocate together employ huge numbers of workers across the metro.
• Tech — a growing software and ad-tech scene, anchored by Fulton Market and the Loop.
• Tourism and conventions — McCormick Place is one of the largest convention centers in North America, drawing trade-show traffic year-round.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics Midwest region. For example, the Chicago metro unemployment rate has typically run a little above the national average, partly because of the size of the metro's manufacturing base, which is more cyclical than service work.

The City of Chicago and Cook County set their own local minimum wages above the Illinois statewide rate, which is itself well above the federal floor of $7.25. The latest rates are published by the Illinois Department of Labor.

Cost of living

Chicago's cost of living is moderate compared to coastal big cities. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $1,700 a month, with downtown and the North Side higher and the South Side, West Side, and outer suburbs lower. Current county-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS Midwest region. Chicago's CPI tends to track close to the national average.

Taxes in Chicago

Chicago residents pay Illinois's flat state income tax, plus among the highest combined sales taxes of any major U.S. city. The combined rate in much of Chicago is above 10%, made up of state, county, city, and a transit-district piece. Property taxes are also high, especially in the suburbs. The state's tax rules live at the Illinois Department of Revenue, and you can read more about how sales tax works in our glossary.

How the Chicago metro fits into the national picture

Chicago sits at the geographic and logistical center of the country. So many railroads, highways, and air routes pass through the metro that disruptions there ripple through national supply chains. When U.S. manufacturing or freight slows, the Chicago metro feels it. When agriculture has a strong year, downstate Illinois benefits — but the metro itself benefits indirectly through the futures markets and the food-processing industry headquartered there.

Why finance is so concentrated here

Chicago grew up as the trading floor for U.S. agriculture — farmers and grain buyers needed a place to lock in prices for crops months in advance. That futures-and-options culture eventually spread from corn and wheat to interest rates, stock indexes, and currencies. The result is one of the largest derivatives markets in the world, regulated by the Commodity Futures Trading Commission, with thousands of related jobs in trading, software, and risk management.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the Chicago metro.