U of I Flash Index up for second consecutive month

February 1, 2017

U of I Flash Index up for second consecutive month

Indicates continuation of slow but steady economic growth in Illinois

Authors

The University of Illinois Flash Index of ecomomic activity in Illinois rose to 104.4 in January from its 104.3 level in December. It is the second straight monthly increase after three months of declining readings, but the index has remained between 104 and 105 since last July. Any index reading higher than 100 indicates the state's economy is growing while readings below 100 indicate contraction.

The current 104-range suggests continued slow steady growth that is somewhat below the levels of 2014-2015, said economist Fred Giertz, who compiles the monthly index for the University's Institute of Government and Public Affairs. This is consistent with the slower national GDP growth for 2016 of 1.6 percent compared to 2.6 percent in 2015.

"The index has been an island of stability the last six months in a period of world, national, and state economic turmoil," Giertz said.

The Illinois unemployment rate remains lower than last year at 5.7 percent compared to a 6.1 rate a year ago, but a percentage point above the national level.

Giertz said state sales tax receipts in January were up from the same month in 2016 after adjusting for inflation, while individual income tax receipts were down slightly. As discussed the last three months, corporate tax receipts are no longer consistent with past years because of new processing procedures in the Illinois Department of Revenue. Rather than a transitory issue, it is now clear that change in permanent. This will require structural changes in the Flash Index that will be incorporated in the near future, Giertz said.

The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income. Tax receipts from corporate income (estimated), 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, 2017. 

View the full Flash Index archive.


Research Area: Economic Policy

Policy Initiative: Flash Index

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