U of I Flash Index continues slow recovery, but faces uncertainty amid COVID-19 resurgence

November 2, 2020

U of I Flash Index continues slow recovery, but faces uncertainty amid COVID-19 resurgence

Authors

The U of I Flash Index in October continued its slow, steady recovery from the low point of the post-COVID-19 period. The October index went up to 95.6 from its 95.1 level in September, but the economy is still well below its strength prior to the pandemic.  

The impact of the recent resurgence of the virus is not captured in the October data. “The October Flash Index obviously comes at the cusp of potential changes related to the election and the virus. We could see continued, gradual improvement, or another drop in the index, depending on the availability of a vaccine or the possibility of further mandated business closures,” said University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. “The short-term impact of the election will likely be less dramatic than many people believe since the economy has a momentum that is difficult to change.”  

The Illinois unemployment rate continued its decline from 11.0 percent to 10.2 percent over the last month, but it is still 2.3 percentage points above the national level, but 6.2 percentage points below its April highpoint. After adjusting for inflation, sales and corporate tax receipts were up from the same month last year while individual income tax receipts were down slightly, continuing the pattern of last month. See the full Flash Index Archive. 

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 October 31, 2020. Ad hoc adjustments have been made to deal with the timing of the tax receipts resulting from state and Federal changes in payment dates beginning in March.

 


Research Area: Fiscal Health of Illinois

Policy Initiative: none

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