The U. of I. Flash Index fell in February to 106.8 from its 107.2 level in January. The index has remained in a narrow range from 106.5 to 107.2 since July of last year, demonstrating how slow the recovery from the recession has been in Illinois.
“The unusually harsh February weather may have also been a negative factor for the index,” said J. Fred Giertz, who compiles the Flash Index for the Institute of Government and Public Affairs. “If so, some of the loss may be captured in catch-up activities in March.”
Even with the lower reading in February, the Illinois economy continues to grow at a slow and steady pace. The index has remained well above the dividing line between growth and decline for the past two years. The last time the Flash Index was below 100 was in February 2012.
The recently revised numbers for fourth quarter national GDP growth reveal that the economy grew at a slower pace than originally reported – 2.4 percent versus the original estimate of 3.2 percent. This slower growth will make it more difficult to achieve progress in reducing unemployment.
There is no new information about unemployment this month because of the delayed release of the data by the Bureau of Labor Statistics. According to Giertz, the Flash Index will be especially interesting in March and April because for the last two years there were unusually strong individual income receipts generated by capital gains reported during tax filing season. With strong gains in the equity markets in 2013, this trend may be poised to continue.
Individual tax receipts were up moderately in real terms compared to the same month last year, while sales tax and corporate tax receipts were down slightly.
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 Feb. 28, 2014.
