COVID-19 pandemic brings Flash Index crashing down from February high

May 1, 2020

COVID-19 pandemic brings Flash Index crashing down from February high

Last two months mark sharpest decline in the index’s history



After last month’s absence, the U of I Flash Index returns with readings for March and April. In February, the index stood at the highest level in over four years at 105.7. In March, the index fell to 99.8, and it fell again to 94.2 in April. The last two months have marked the sharpest decline in the index’s history with calculations going back to 1981.

“With the COVID-19 crisis, this is a situation where ‘you don't need a weatherman to know which way the wind blows,’” said University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. “The abrupt closure of the U. S. and Illinois economies in March changed the economy from a moderate and steady growth path to one of precipitous decline.”

Most downturns result from waning demand that ultimately may lead to recession, beginning gradually and then gaining momentum. This downturn is different because it is the result of mandated shutdowns to combat the spread of the COVID-19. The economy has suffered collateral damage from this supply-side shock.

“This is largely uncharted territory,” Giertz said. “The question now is the speed of the recovery once restrictions are eased and eliminated.”



First-quarter GDP fell by 4.8%. Most of this decline likely occurred in just the month of March. It is cold comfort that Illinois’ unemployment rate fell below the national rate in January and February — a feat that few would have predicted. However, the Illinois rate increased from a historic low of 3.4% in February to 4.6% in March with every indication that this is just the beginning of the rate going up.

The Flash Index is normally 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 April 30, 2020.

The index covers two months because the COVID-19 pandemic compromised components in March, leaving IGPA unable to publish the index for March on its usual schedule. For March and April, several ad hoc adjustments were made to deal with the timing of the tax receipts resulting from state and federal changes in payment dates that were made to lessen the impact of the closures. See the full Flash Index Archive


Research Area: Fiscal and Economic Policy

Policy Initiative: none