The U of I Flash Index for November 2023 fell to 102.6 from its 103.0 reading in October. This reflects a slowing of state revenues, a building block of the Index, as well as a slight increase in the unemployment rates in Illinois and the nation.
An Index value of 100 is the dividing line between growth and decline.
“The declining index is consistent with the soft-landing scenario for the economy which entails moderating inflation and slowing growth. The soft-landing scenario avoids a recession that until a few months ago seemed likely.”
The unemployment rate in Illinois rose to 4.6% from 4.4% last month while the U. S. rate ticked upward to 3.9%, a one-tenth of a percentage point increase. As noted above, inflation-adjusted receipts for the individual income tax and the sales tax were down compared to the same month last year while corporate tax revenues were up.
The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income as estimated from receipts for corporate income, individual income, and retail sales taxes. These revenues are adjusted for inflation before growth rates are calculated. The growth rate for each component is calculated for the 12-month period using data through November 30, 2023. Since the beginning of the COVID-19 crisis, ad hoc adjustments are still needed because of the timing of the tax receipts resulting from state and Federal changes in payment dates in recent years.
“The declining index is consistent with the soft-landing scenario for the economy which entails moderating inflation and slowing growth. The soft-landing scenario avoids a recession that until a few months ago seemed likely.”
