Illinois economic growth remains stable; Flash Index off slightly in March

April 2, 2018

Illinois economic growth remains stable; Flash Index off slightly in March


The Illinois economy remains in a period of slow stable growth, reflecting the strong national economy, according to the latest University of Illinois Flash Index. The index dipped in March to 104.5 from February’s 104.6, however it remains within the same 104 to 105-point range it has been since early 2016.

“Despite a number of potential threats, most importantly, a trade war and volatile financial markets, the U. S. economy continues strong,” said U of I economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. Nationally, fourth quarter GDP growth was revised upward to 2.9 percent, only barely missing the 3 percent goal of the Trump Administration, he said.

Index readings above 100 indicate that the state’s economy is growing, while readings below 100 indicate economic contraction. The last time the Flash Index was below 100 was February 2012. It has held within a range of 103.9 to 105 since June 2016. See the full Flash Index archive.

The state’s unemployment rate, which can affect the tax components that comprise the Flash Index, dipped in March to 4.7 percent, the lowest in more than 10 years, while the state also closed the gap with the U. S. rate that remained steady at 4.1 percent.

Two components of the index (the individual income and corporate tax receipts) were down in March while sales tax receipts were up for the month compared to the same month last year after adjusting for inflation. Federal tax changes may affect future state income and corporate tax revenue because of the link between federal and state tax base that may affect the index.

The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income. Tax receipts from corporate income, personal income and retail sales 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 March 31, 2018.

Research Area: Fiscal Health of Illinois

Policy Initiative: none