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U of I Flash Index jumps one full point in January to 95.9
The Illinois economy remains in a state of decline, according to a key monthly indicator, but the outlook for recovery is growing brighter.
The University of Illinois Flash Index increased in January to 95.9, a full point higher than the 94.9 posted in December. The index, which uses state tax receipts as a measure of economic activity, has increased for eight consecutive months but remains below 100, which is the level that marks the dividing line between economic decline and growth.
The increase in the Flash Index over the past eight months is reinforced by recent reports that national economic growth has been stronger than expected, said University of Illinois economist J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs.
“Gross Domestic Product growth was estimated at 3.2 percent in the fourth quarter of 2010,” he said. “This growth has had a small impact on bringing down unemployment rates.”
The national rate stands at 9.4 percent while the Illinois rate in December was 9.3 percent – both very high despite the improvement in the economy, indicating it will take more time to achieve full recovery from the 2007-2008 recession.
In real terms, individual income tax and sales tax collections increased from the same month last year while the corporate income tax was down slightly.
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 January 31, 2011.