February 1, 2012 _ After two consecutive months of gains, the University of Illinois Flash Index dipped slightly in January to 98.8, reflecting the continued sluggish pace of recovery in Illinois.

Overall, the index continues to reflect steady improvement in the economy, rising from a recession low of 90 in September 2009 to a post-recession high of 99.1 last month. A reading below 100 indicates contraction in the state’s economy, while readings of 100 and higher indicate the state’s economy is growing.

Unemployment continues to be a significant drag on the economy, said U of I economist J. Fred Giertz, who compiles the Flash Index for the Institute of Government and Public Affairs. The state rate continues to hover near 10 percent and national employment levels remain relatively stagnant.

“While the current (Flash) reading is still the second highest in over three years, it suggests that the Illinois economy is still improving very slowly,” Giertz said.

The Flash Index provides a monthly snapshot of the Illinois economy, using a weighted average of growth rates in the state’s corporate earnings, consumer spending and personal income. Tax receipts for the preceding month, adjusted for inflation, provide the data used to calculate the growth rates and the index on the first business day of each month. The growth rates for each component of the January index were calculated for the 12-month period using data through January 31, 2012.

“After adjustment for the individual and corporate income tax increases last year (which took effect in January 2011), individual income tax and corporate tax receipts were down slightly in real terms compared to the same month last year, while sales tax receipts were up,” Giertz said.

Because January 2011 was a month of transition from old to new income tax rates, it is difficult to determine whether the January 2012 dip was the beginning of a new trend or a statistical anomaly, Giertz said.

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