U of I Flash Index at lowest level so far in 2019

September 3, 2019

U of I Flash Index at lowest level so far in 2019

Illinois economy slows in August, but continues growth

Authors

The University of Illinois Flash Index fell to 105.1, its lowest level so far this year. The dip in August comes after an uptick in July, when the index was at 105.4.

University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs, said that despite conjecture about a possible recession in the national economy, this decrease in the Flash Index does not signal a recession. Generally, a recession is characterized by the GDP declining for two quarters.

“The Illinois economy appears to be slowing slightly from its recent moderate pace. This, however, is far from an indication of a recession,” Giertz said. “The national and Illinois economies are still growing, albeit at a slower rate. Remember that any Index reading above 100 denotes growth.”

Two of the three components of the Flash Index, individual income and corporate tax receipts, were down from the same month last year after adjusting for inflation and rate changes. The third component, sales tax receipts, increased.

The unemployment rate in Illinois fell slightly to 4.2 percent, tied for the lowest in recent decades. This suggests continued strength, although unemployment is a lagging indicator that tends to increase only after the overall economy slows.

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, personal 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, 2019. See the full Flash Index archive.

 


Research Area: Fiscal and Economic Policy

Policy Initiative: none

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