U of I Flash Index falls in November

December 1, 2016

U of I Flash Index falls in November

Indicator of economic activity in Illinois down for third consecutive month


The University of Illinois Flash Index for November fell to 104.1 from its 104.3 level in October, marking the third consecutive month of decline in the measure of economic activity in Illinois. The index, published by the University's Institute of Government and Public Affairs (IGPA), has declined in five of the past six months. (See archive.)

These declines indicate a slowing in economic growth in the state but the economy continues to grow just the same. A Flash Index reading of 100 or below would indicate that the Illinois economy was contracting.

The index has been problematic the past two months because of an unexplained decline in corporate tax collections, said economist J. Fred Giertz, who compiles the index for IGPA. Corporate collections in October and November this year totaled less than $5 billion compared to $126 billion for the same months last year, he said. 

"Last month, the Illinois Commission on Government Forecasting and Accountability stated: 'With only a net total of $3 million for the month, clearly some processing anomaly at the Department of Revenue occurred'" Giertz said. "Ad hoc adjustments were employed in the calculation of the index to deal with this problem."

Corporate and sales tax receipts were down in November from the same month in 2015 after adjusting for inflation, while individual income tax receipts were up.

The national economy rebounded strongly in the third quarter, growing at a rate above 3 percent for the first time in two years. The state unemployment rate ticked up by one-tenth of a percentage point to 5.6 percent compared to the 4.9 percent national rate.

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 November 30, 2016.

Research Area: Fiscal Health of Illinois

Policy Initiative: none