U of I Flash Index reaches highest level in nine months

June 1, 2017

U of I Flash Index reaches highest level in nine months

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The University of Illinois Flash Index jumped up to 104.6 in May, putting the measure of the Illinois economy at its highest level in the past nine months.

The rise from 104.3 in April represents surprisingly good news from both the national and state economy, said economist J. Fred Giertz, who compiles the Flash Index for the university’s Institute of Government and Public Affairs. The index hasn’t been this high since reaching 104.8 in August 2016.

“Despite the apparent dysfunction in both Washington and Springfield, the economy continued to expand at the now familiar slow, steady rate of around 2 percent,” Giertz said. “There are expectations now that the second quarter will be considerably stronger than the slow first quarter of 2017.”

There was particularly good news in regard to unemployment in May, Giertz said. The Illinois rate fell to 4.7 percent, the lowest in 10 years. Further, the Illinois rate is now only 0.3 percent above the national rate. This contrasts to most of the recovery where the Illinois rate was more than 1 percent higher than the national level.

The Flash Index uses tax receipts to measure economic activity in Illinois. Any reading higher than 100 indicates growth in the economy, while readings below 100 indicate contraction. The Flash Index has been in the 104.0 to 104.8 range since July 2016. View the Flash Index history.

Both individual income tax and sales tax receipts in May were up markedly from the same month last year after adjusting for inflation, Giertz said. Corporate tax receipts remain non-comparable to past years because of new processing procedures in the Department of Revenue.

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 May 31, 2017.

 

 


Research Area: Economic Policy

Policy Initiative: Flash Index

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