CHAMPAIGN, Ill. In the first month of 2002, the University of Illinois Flash Economic Index fell to 97.1 from its 97.8 level in December. Despite isolated signs of recovery, the recession continues in Illinois.
The recession that started last March is still mild by historical standards. The Flash Index dropped below 93 in the last recession in the early 1990s and was below 86 in the early 1980s. Surprisingly, preliminary measures of U.S. growth for the fourth quarter of 2001 were slightly positive, “which again indicates the mild nature of the recession so far,” said J. Fred Giertz, a UI economist who released the Illinois data today.
Corporate tax receipts remain the weakest component of the Index. Sales-tax receipts in Illinois were actually up in “real” (inflation-adjusted) terms from the same month last year, while individual income tax receipts as well as corporate receipts were down.
A year ago in January, the overall Index was at 101.2. Any reading below 100 indicates that the state economy is contracting, while any number above 100 means the economy is expanding.
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 Jan. 31.
