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UI Flash Economic Index indicates a continued slowdown

Mark Reutter, Business Editor
(217) 333-0568;


EDITORS, NEWS DIRECTORS: The Flash Index of Economic Growth, produced by economists at the University of Illinois, is based on the most up-to-date information on the state economy.

CHAMPAIGN, Ill. -- A continued slow down -- but not precipitous decline -- in the state economy was indicated by the December University of Illinois Flash Economic Index.

The Illinois economy ended the year with a monthly reading of 101.8, off marginally from the November figure of 101.9. A year ago in December, the Index was 102.1.

"There is no question that Illinois has slipped back from its rapid expansion of 1995-1999, but the economy is still growing and so far nothing indicates a recession," said J. Fred Giertz, a UI economist who released the Flash Index today (Jan. 3).

A recession is defined as two consecutive quarters of decline in economic activity. Countering recent trends, Illinois corporate-tax receipts in December were up in "real" (inflation-adjusted) terms, while personal income-tax collections were down slightly. The sales-tax numbers confirmed reports from retailers of a slow Christmas season.

"The key question now is whether we will achieve a Ôsoft landing,Õ as desired by the Federal Reserve Bank, or whether the slowdown will move into a recession," Giertz said.

The Flash Index is a weighted average of growth rates in sales-tax receipts, individual income-tax receipts and corporate-earning receipts in Illinois. The growth rate for each component is then calculated for the 12-month period using data through Dec. 31.

Any reading above 100 means the state economy is expanding, while any number below 100 indicates the economy is declining.