U of I Flash Index rises again in December

January 2, 2019

U of I Flash Index rises again in December

Illinois economic barometer shows continued growth through 2018


The University of Illinois Flash Index reached 105.5 in December, up two-tenths of a point from the previous month and a 34-month high. The monthly barometer of the Illinois economy rose more than a full point over the course of the year and ended 2018 at its highest point since hitting 105.6 in February 2016.

The Flash Index, which measures growth in the economy using tax receipts, began 2018 with a reading of 104.4 in January. Any index reading above 100 indicates growth in the economy. The Flash Index has not been below 100 since February 2012. See the full Flash Index archive.

“The Illinois economy did relatively well the last 12 months,” said University of Illinois economist J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs. “Many reports have focuses on Illinois’ continuing slow population decline. However, recently released numbers show that Illinois per-capita income growth the last four quarters exceeded the national average, ranking eleventh among the states.”

“Illinois recovered slowly from the Great Recession, but the state’s economy appears to be growing more rapidly now,” Giertz said. However, he cautions that the strong performance may be temporary because “the state's long-term budget problems have still not been addressed and the national economy faces considerable uncertainty as 2019 begins.”

Recent reports have emphasized that population growth is not synonymous with wage growth in many states. Earlier this month, Fitch Ratings stated in regard to Illinois that the long-established phenomenon of slow population growth “has not prevented the state’s economy from continuing a long pattern of overall growth.” 

Corporate and sales tax receipts were up in December from the same month in 2017 after adjusting for inflation and rate changes while individual income tax receipts were down slightly. The Illinois unemployment rate, an indicator not included in the Flash Index, remained at 4.2 percent compared to the 3.7 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 December 31, 2018.

Research Area: Fiscal Health of Illinois

Policy Initiative: none