U of I Flash Index slips in September

October 2, 2017

U of I Flash Index slips in September

Indicates slight slowing in Illinois’ economic growth


The University of Illinois Flash Index slipped to 104.2 in September, it’s lowest reading since February. The decline from a reading of 104.5 in August may indicate a slight slowing in Illinois’ economic growth.

The Flash Index is a monthly indicator of the state's economy based on the state’s tax receipts and consumer spending. Readings above 100 indicate the economy is growing, while readings lower than 100 indicate contraction in the economy. The Flash Index has remained in the 104-105 range for the past 14 months. View the complete Flash Index archive.

All three components of the index were down slightly in September from the same month a year ago, after adjustments for new tax rates, said economist J. Fred Giertz, who compiles the Flash Index.

“The transition to the new higher individual and corporate income tax rates, which became effective in July, is likely now complete with the new monthly receipts adjusted for the current rates,” Giertz said. “The new rates may still have a one-time impact next year in the filing season if withholding and estimated payments have not fully accounted for the changes.”

Further indication of slowing growth is reflected in an unemployment rate that has risen from a low earlier this year of 4.7 percent to 5 percent, Giertz said. The Illinois rate is now six-tenths of a percentage point above the U. S. average compared to three-tenths earlier this year. 

“U.S. economic growth for the second quarter was revised upward from 3 percent to 3.1 percent, the best in some time,” Giertz said. “Strong national growth should help Illinois.”

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 September 30, 2017.

Research Area: Fiscal Health of Illinois

Policy Initiative: none