The University of Illinois Flash Index for April 2023 continued to decline from 103.1 in March to 102.9 in April. This suggests growth is slowing, but still positive. Any index value above 100 indicates expansion.
“In the ongoing recession watch, the needle has moved more toward a recession later this year according to many observers.”
GDP for the first quarter slowed to 1.1% accompanied by many reports of layoffs in the formerly hot tech sector. However, the unemployment rate continues its robust performance with both the Illinois and national rates falling one-tenth of a percentage point. These rates remain near the post-WWII low.
The three main components of the Index (individual income, corporate, and sales tax receipts) were all down in inflation-adjusted terms from April 2022. Individual income tax revenues fell the most compared to the strong receipts in the April 2022 filing period.
“Recent reports contained both good and bad news for the state.”
The Internal Revenue Service reports that Illinois suffered the third largest loss of reported income (after New York and California) from net migration. However, a Wall Street Journal report ranked Bloomington (#2) and Springfield (#9) in their Emerging Housing Markets Index for the nation. The index attempts to identify “emerging housing markets that offer a high quality of life and are expected to see future home price appreciation.”
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 revenues 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, 2023. Over three 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 in recent years.