The U. of I. Flash Index fell again in January to 105.3 from its 105.5 level in December. As was the case last month, this is the lowest reading since March 2013 (104.7). This is consistent with data indicating a national economic slowdown.
National gross domestic product grew at a slow 0.7 percent rate in the fourth quarter of 2015, yielding an annual rate around 2 percent. This marks a continuation of a slow recovery from recession in 2008. However, according to J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs, “the current national slowdown does not signal a recession because the economy is not contracting. It is still growing, albeit at a slower rate.”
State unemployment rose again this month to 5.7 percent. This means the Illinois level is again diverging from the national rate that stands at 5.0 percent.
Sales tax receipts in real terms changed little from the same month last year. Comparisons for the individual income and corporate taxes between January 2015 and 2016 are problematic because of the reduction in the two rates in January 2015. Last January’s tax receipts reflected a mixture of the two rates, making meaningful comparisons difficult.
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 was calculated for the 12-month period using data through Jan. 31.