U of I Flash Index drops slightly for second month in a row

September 1, 2021

U of I Flash Index drops slightly for second month in a row


The University of Illinois Flash Index in August fell slightly to 105.6 from last month’s level of 105.8.

This was the second month of modest decline in the index since it recovered to 106.0 in June of this year from 93.1 in June of 2020. See the full Flash Index Archive for monthly readings. 

“The plateauing of the index should not be a source of concern since the economy has reached its pre-crisis and is still growing at a healthy rate, well above the 100-level dividing growth and decline,” said University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. “The reemergence of COVID-19 concerns may also have had a dampening impact, although clearly less severe than last year The outlook remains positive for the U.S. economy with continued federal stimulus activity and the pent-up demand that emerged after the shutdown”

However, Giertz warns that the picture for Illinois is less sanguine with the state’s unemployment rate at 7.1%, well above the national rate of 5.4%. After adjusting for inflation, Illinois sales tax receipts were up from the same month last year while individual income tax revenues were down slightly. The corporate tax was down by a large amount in percentage terms, but August is a low month for corporate receipts. The corporate and individual receipts were impacted by changing filing dates that resulted from COVID disruptions.

The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income as estimated from receipts for corporate income, individual income, and retail sales taxes. These 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 August 31, 2021. Even though more than a year has passed since the beginning of the COVID-19 crisis, ad hoc adjustments will still be needed for some time because of the timing of the tax receipts resulting from state and Federal changes in payment dates both this and last year. 


Research Area: Fiscal and Economic Policy

Policy Initiative: none