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UI Flash Index rises slightly; slowdown is moderating, economist says

J. Fred Giertz, Institute of Government and Public Affairs
(217) 244-4822

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

Released 7/1/2002

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. — The University of Illinois Flash Economic Index rose last month to 95.0 from its 94.2 level in May.

This is the first increase in the Index in eight months, but it does not necessarily mean that the Illinois economy is rebounding. The level is still below 100, the dividing line between growth and decline, but the up-tick last month does suggest that the slowdown is moderating.

The last fiscal year, ending June 30, brought "unremitting bad news for the Flash Index," said J. Fred Giertz, the economist at the University of Illinois at Urbana-Champaign who released the data today.

"The Index has remained below 100 for the entire year, and this performance is reflected in the fiscal position of the state of Illinois," Giertz said. "For the first time in recent memory, state revenues fell compared to the preceding year and missed their forecast level by 6 percent (approximately $1.5 billion)."

The good news is that the downturn has been moderate compared to other recent recessions. "Unemployment has increased by more than 1 percentage point in the last year, but the current 6.3 percent level in Illinois is very low for a recession period," he said.
Corporate tax receipts were up in June compared to June a year ago. Sales taxes receipts were nearly constant, and individual income tax receipts were down.

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 June 30.

line chart showing recent spike in long downward trend