The U of I Flash Index for July 2023 rose to 103.2 from 103 in June. The Index has hovered in a narrow range this calendar year. Although the Index is basically unchanged, the national economic outlook as evidenced by most analysts has improved markedly in the last month.
“The combination of moderating inflation and an unexpectedly strong second-quarter GDP growth rate of 2.4% has generated a more optimistic view that the economy may avoid what was once thought to be an inevitable recession. However, a word of caution is in order since these trends are still tentative.”
The Illinois unemployment rate continued its decline, falling to a surprising 4%, only four-tenths of a percentage point above the national level. Illinois tax revenues were relatively strong with both individual income and corporate tax receipts up in inflation-adjusted terms compared to the same month last year while sales tax receipts were down slightly in real terms.
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 calculated for the 12-month period using data through July 31, 2023. 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.
“The combination of moderating inflation and an unexpectedly strong second-quarter GDP growth rate of 2.4% has generated a more optimistic view that the economy may avoid what was once thought to be an inevitable recession. However, a word of caution is in order since these trends are still tentative.”