U of I Flash Index continues to climb, but remains below pre-pandemic level

October 1, 2020

U of I Flash Index continues to climb, but remains below pre-pandemic level

Authors

The U of I Flash Index in September increased to 95.1 from its 94.6 level in August. This is a continuation of the slow recovery of the index after the precipitous declines from February to May of this year. 

“The index portrays two quite different stories depending on the time frame. Over the last four months, the Illinois economy is rebounding from the worst of the COVID-19 crisis of the spring, but it clearly has far to go to recover its pre-crisis strength,” said University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. This is the seventh consecutive month that the index has fallen short of the 100-dividing line between growth and decline. See the Flash Index Archive.

The Illinois unemployment rate declined again to 11.0% from 11.5% the previous month, but it is still 2.6 percentage points above the national level, suggesting a slower recovery here.

Illinois tax receipts that go into the calculation of the index were surprisingly strong in September. After adjusting for inflation, sales and corporate tax receipts were up from the same month last year, while individual income tax receipts were down. 

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 September 30, 2020.  For the last six months, 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.

 

 


Research Area: Fiscal Health of Illinois

Policy Initiative: none

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