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U of I Flash Index Increases to Highest Point Since December 2008
Despite the recent spate of bad economic news, the University of Illinois Flash Index increased to 98.8 in September, up one point from where it was for the past three months. This is the highest level since December 2008, reports economist J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs.
“There is increasing concern that the national economy is headed back into recession—the much discussed double dip—but the September Flash Index results suggest that this fear may be overblown for Illinois,” Giertz said. The index was at its lowest point, 90.0, in September of 2009. The index has shown a trend of slow increase over the past two years, but remains below 100, which is the dividing line between expansion and contraction.
There is always the possibility that the results for a single month may be influenced by transitory factors. Next month’s index will be important to determine whether the September results reflect a trend, Giertz said.
After adjustment for the individual and corporate income tax rate increases earlier this year, all three components of the index (individual income tax, corporate tax and sales tax receipts) were up in real terms compared to the same month last year.
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 September 30, 2011.