March U of I Flash Index hits highest reading since 2020 crash

April 1, 2022

March U of I Flash Index hits highest reading since 2020 crash


The March University of Illinois Flash Index moved ahead strongly in March, rising to 106.1 compared to 105.7 in February.

“This is a post-crisis high,” said University of Illinois economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. “The Illinois economy gained strength as measured by state tax receipts for the month, overcoming the economic headwinds of the invasion of Ukraine and the most recent variant of the COVID-19 virus.”

As noted in recent reports, state tax revenues have been extremely strong as has been the case for other states and the federal government. “This raises concerns about the stability of the ratio of tax receipts and economic activity that is the fundamental building block of the index,” said Giertz. “These issues should be resolved once the disruptions of the COVID-19 crisis recede.”

Illinois unemployment data provide support for the strength of the index. The unemployment rate in Illinois fell to 4.8%, which is also a post-recession low, from 5.0% the previous month and 6.9% a year ago.

Many observers have expected the economy to slow somewhat in 2022, but this has yet to materialize. Even after adjusting for the recent high rate of inflation, all three components of the index were up from the same month last year, with corporate and individual tax receipts especially strong. See The Full Flash Index Archive. The recently released national GDP growth rate for the last quarter of 2021 was also strong at an inflation-adjusted 7.0%.  

The Flash Index is the 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 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, 2022. After two 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.



Research Area: Fiscal and Economic Policy

Policy Initiative: none