U of I Flash Index up in November, but Omicron variant and supply chain woes cloud state’s economic future

December 1, 2021

U of I Flash Index up in November, but Omicron variant and supply chain woes cloud state’s economic future

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The University of Illinois Flash Index in November rose slightly to 105.5 from its 105.4 level last month. However, the reading from November does not reflect the economic impact of the new threat of the Omicron coronavirus variant.

“This suggests the economy may remain in a twilight world for some time in which concerns about the virus remain unresolved,” said University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs.

But, Giertz said that longer-term prospects for the economy remain positive. “There is strong pent-up consumer demand, although the picture is clouded by supply chain problems, the threat of inflation, and, now, the new virus concern,” he said.

All the components of the Flash Index (individual income tax, sales tax, and corporate tax receipts) were up slightly compared to the same month last year after adjusting for inflation. The Illinois unemployment rate fell to a post-recession low of 6.0% compared to the 8.1% rate a year ago. The Illinois rate is still well above the national level of 4.6%. 

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 November 30, 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. See the full Flash Index Archive

 

 


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