U of I Flash Index dips more than two points in June to 92.0

 The Illinois economy remains in the doldrums of the national recession, according to the latest University of Illinois Flash Index. The index, which ticked up slightly in May, dropped more than two full points in June, from 94.1 to 92.0. The reading is now below the lowest levels of the 1990 and 2001 recessions, however it is still far above the historical low point of 86.2 in June 1983.

“Even though there is considerable optimism now that the recession will end late this year, in the words of Yogi Berra, ‘It ain't over till it's over,’” said economist J. Fred Giertz, who compiles the Flash Index for the university’s Institute of Government and Public Affairs. “A recession means that the economy is contracting. The end of a recession is at the low point of this decline which means there will likely be further decreases in the index before the economy turns around.

“The current low reading does not necessarily suggest that this optimism is misplaced, but it does mean that there will continue to be some bad news before the recession ends,” Giertz said.

In real terms, all three components of the Flash Index -- individual income tax receipts, corporate tax receipts, and sales tax receipts -- were down from the same month last year, Giertz said. Individual income tax receipts were likely negatively affected by low estimated payments in June because of reduced capital gains.

The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income. Tax receipts from corporate income, personal income and retail sales are adjusted for inflation before growth rates are calculated. The growth rate for each component is then calculated for the 12-month period using data through June 30, 2009.