The UI Flash Index fell to 98.3 in October, down half a point from 98.8 last month. The index increased sharply in September, and remains above the 97.8 level that prevailed from June through August of this year.
Although the index fell slightly in October there is room for optimism, said economist J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs.
“The two-month result suggests that the economy is not likely headed for a double-dip recession that was a concern nationally last month,” Giertz said.
Illinois’ economy is still sluggish, with the index indicating a number below 100, which is the dividing line between expansion and contraction. The unemployment rate remains high at 10 percent in September, which is well above the national rate. This marks a change from results earlier this year when Illinois was below the national level, Giertz said.
After adjustment for the individual and corporate income tax rate increases earlier this year, individual income tax and corporate tax receipts were down in real terms compared to the same month last year while sales tax receipts were up.
The 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 Oct. 31.
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