U of I Flash Index ticks down slightly in December

January 2, 2018

U of I Flash Index ticks down slightly in December

Near-steady reading indicates continued slow growth of Illinois economy

Authors

The University of Illinois Flash Index ticked down slightly in December to 104.1 from November’s 104.2 level. The index has remained in the 104-105 range for the past 18 months, with only one exception, indicating slow and steady growth of the Illinois economy.

The Flash Index, which is compiled by the university’s Institute of Government and Public Affairs, has dipped below 104 only once – in October when it slipped to 103.9 – since November 2012. Any index reading above 100 indicates growth in the economy, while readings below 100 indicate contraction. View the complete Flash Index archive.

“Both the Illinois and national economy ended a remarkably stable year despite turmoil in the political arena,” said economist J. Fred Giertz, who compiles the monthly index. “The Flash Index hovered around the 104 level for the year, slightly lower than 2016” when the index was above 104.5 for most of the year.

“Both the Illinois and national unemployment rate remained unchanged from last month at 4.9 and 4.1 percent respectively,” Giertz said. “The Illinois economy continues to expand at a modest rate while still lagging the national economy.”

Individual income tax and sales tax receipts in the state (adjusted for rate changes and inflation) were down in December compared to the same month last year while corporate collections were up. The recently enacted federal tax changes could have impacts on future state tax revenues because of the link between federal and state tax bases. This could impact the 2018 index, requiring certain adjustments.

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, 2017.


Research Area: Economic Policy

Policy Initiative: Flash Index

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