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Flash Index ends 2013 on a strong note
The Flash Index ended the year on a strong note, rising to 107.0 in December from its 106.5 level in November, well above the dividing line between economic growth and decline.
The 107.0 reading matches the high for the year that was first achieved in September, a post-recession high and the highest level since April 2007 when the index stood at 107.4. The year’s lowest level was 104.7, in March. The trend over 2013 was steady increase, with only the occasional slight dip, signaling slow but consistent economic expansion.
The strong performance of the Illinois economy in December is mirrored by recent results from the national economy where GDP growth reached 4.1 percent for the third quarter of 2013. This was only the second quarter where growth exceeded 4 percent in the past eight years. The national unemployment rate has fallen to 7 percent while the Illinois unemployment rate fell to 8.7 percent.
“The unemployment rates are still high compared to pre-recession levels, but this is welcome news nevertheless,” said J. Fred Giertz, who compiles the index for the university’s Institute of Government and Public Affairs. “The year ended with strong results that have engendered considerable optimism for 2014. There is hope that the economy may finally break out of the painfully slow recovery mode and move into a higher gear.”
All three components of the index (individual income, corporate and sales tax receipts) were up in real terms compared to the same month last year. Both individual and corporate income tax receipts were up by more than 10 percent. Sales tax receipts increased by 4 percent in real terms compared to December 2012, reflecting a reasonably good holiday sales season.
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 December 31, 2013.