May U of I Flash Index declined slightly for the second month

June 1, 2022

May U of I Flash Index declined slightly for the second month


U of I Flash Index—May 2022 


The University of Illinois Flash Index fell in May, declining to 105.7 compared to 106.0 in April.

The lower index reading does not mean the Illinois economy is contracting because any reading above 100 indicates growth.

“The uncertainty in the state and national economies discussed last month is still unresolved,” said University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. “Two contrasting pictures emerge. Unemployment is falling in Illinois to a post-recession low of 4.6% in contrast to 6.6% a year ago. Consumer spending remains strong, job openings are plentiful and tax receipts exceed forecasted levels.”

Giertz said that this suggests a growing economy, however, there is increasing concern about a recession in the next twelve months. This is based on the intention of the Federal Reserve to tighten monetary policy to deal with the unexpectedly high and persistent inflation along with the gradual reduction of various Federal stimulus programs that grew to unprecedented levels during the Covid crisis.  

“The current situation is unlike most recent downturns in that the problem is largely supply induced rather than one of deficient demand. The Covid crisis resulted in supply chain problems and exits from the workforce. This has been exacerbated by the war in Ukraine.”  

Individual income tax receipts were down substantially from the same month last year after adjusting for inflation because of the different filing months in the two years. Corporate and sales tax receipts were little changed. See the full Flash Index archive

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 May 31, 2022. After more than two years since the beginning of the COVID-19 crisis, ad hoc adjustments are still needed because of the timing of the tax receipts resulting from state and Federal changes in payment dates.


Flash Index three year chart



Research Area: Fiscal and Economic Policy

Policy Initiative: none