Urbana – The U of I Flash Index for February 2023 increased to 103.4 from the 103.1 level in January, fueled by strong Illinois state revenues. The Illinois economy is still growing moderately after the surge of the recovery from the COVID recession.
“In what has become a repetitious summary over the last six months, the Illinois and national economies still provide no clear signals of whether a soft landing or modest recession is in store later this year.”
Giertz said in fact, a third possibility has been suggested, one of no landing at all with continued modest growth. The unemployment rate remains low, inflation is moderating although not as rapidly as the Federal Reserve would like, consumer spending continues at a rapid pace, and supply bottlenecks are easing. However, the housing market is extremely slow, interest rates may still rise faster than expected, and layoffs and retrenchments continue in the tech sector.
“Results for the three main components of the Index (individual income, corporate, and sales taxes) were all positive. The three were up in real terms from the same month last year which was also very strong.”
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 January 31, 2023. Nearly 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 what has become a repetitious summary over the last six months, the Illinois and national economies still provide no clear signals of whether a soft landing or modest recession is in store later this year.”