The U. of I. Flash Index reversed a three-month trend in November and climbed to 106.1. The index measures economic activity in Illinois and shows that the state continues to slowly recover from the Great Recession, which technically ended more than six years ago. (See full archive.)
The increase to 106.1 reverses three straight months of decline, which saw the index fall from 106.6 in August to 105.8 last month. The decline indicated only a minor slowing of growth for those three months, as an index of 100 marks the division between growth and shrinkage in the economy.
The U.S. economy remains strong in comparison with the rest of the world, said U. of I. economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs. While state and national unemployment remained stubbornly high for several years during the recovery, rates have come down the last couple of years to pre-recession levels. For instance, the Illinois rate was over 10 percent in 2011 and has fallen to 5.4 percent today. The hope now is that wages also will begin to respond, Giertz said.
“There is no definitive way to isolate the impact on the economy of the continuing state budget impasse,” Giertz said. “The growth of the Illinois economy has not changed markedly since the situation began in July. At some point, however, the deadlock will take its toll.”
After adjustments for the new individual and corporate tax rates, corporate and individual income tax receipts were up while sales tax revenues were down slightly in real terms from the same month last year.
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 Nov. 30.
CONTACT: J. Fred Giertz, jgiertz@illinois.edu or 217-840-9148
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