U of I Flash Index ticks down in January

February 1, 2019

U of I Flash Index ticks down in January

Index remains near three-year high despite decrease


The University of Illinois Flash Index slipped a tenth of a point in January, falling to 105.4. As it has been for the past four months, the Flash remains near its three-year high of 105.6 reached in February 2016, indicating that the Illinois economy remains relatively strong.

The Flash Index is a monthly measure of economic activity in Illinois as determined by individual, corporated and retail sales tax receipts. A reading above 100 indicates economic growth.

The Illinois unemployment rate rose by one-tenth of a percentage point to 4.3 percent while the national rate rose to 3.9 percent, an increase of two-tenths of a point.

“This is still very low by historical standards,” said U of I economist J. Fred Giertz, who compiles the Flash Index for the University System’s Institute of Government and Public Affairs. “There is increased concern that the national economy may weaken in 2019 with growth falling below the 3 percent threshold. Slower growth in the world economy is the reason for this concern.”

After 10 years of expansion, talk of a recession is beginning to emerge, but there is little evidence of anything more than a slight slowdown at this point, Giertz said.

While there has been intense coverage of the partial federal government shutdown, this closure has had a minimal impact on the economy so far, he said.

Illinois’ individual and corporate tax receipts were down in January from the same month last year after adjusting for inflation and rate changes, while sales tax receipts were up slightly. Individual income receipts in January were likely affected by lower estimated tax payments compared to last year because of a reduction in capital gains in 2018 caused by a weak stock market. 

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 January 31, 2019.


Flash Index 3-year chart

Research Area: Fiscal Health of Illinois

Policy Initiative: none