Flash Index: June 2016

July 1, 2016

Flash Index: June 2016

Economic growth slows moderately in first half of 2016

Authors

The University of Illinois Flash Index fell slightly in June to 105.0 from its 105.3 level in May. The index has settled in the 105 range for the past six months after a two-year period in the 106 to 107 range. Any reading above 100 indicates economic growth.

The consistency in readings in the first half of 2016 suggests that the Illinois economy is growing, although somewhat more slowly now than in 2014 and 2015. There is good news, however, about unemployment.

“On a positive note,” said J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs, “Illinois’ unemployment rate fell for the first time after six months of increases.” Unemployment was 6.4 percent in June, down from 6.6 percent in May. However, Illinois’ rate remains substantially above the national rate of 4.7 percent.

“The economic turmoil of last week, involving both the international markets and the Illinois budget negotiations, should not have affected the index in June,” Giertz clarified.

Individual income tax and sales tax receipts were up for the month while corporate tax revenues were down from the same month last year after adjusting for inflation.

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 June 30, 2016.


Additional Resources

Research Area: Economic Policy

Policy Initiative: Flash Index

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