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August flash index of economic growth holds steady at July reading

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

Mark Reutter
(217) 333-0568; mreutter@illinois.edu

9/3/2002


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

CHAMPAIGN, Ill. — The University of Illinois Flash Index remained flat for the month of August with the same 95.4 reading of July.

While the economic level is higher than during the second quarter, it is well below the 100 dividing line between growth and contraction for the Illinois economy. A year ago in August, the Flash Index was 98.

The latest reading is consistent with national economic data that suggest a slow rebound from the 2001 recession. Most observers believe that the national economy will avoid a "double dip," or a return to recession, but such uncertainties as possible war in Iraq and a continued bear market on Wall Street could upset any recovery.

All three components of the Flash Index were down slightly last month from August 2001, underscoring the state’s lackluster performance, according to J. Fred Giertz, the economist at the University of Illinois at Urbana-Champaign who released the Flash results today.

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 Aug. 31.

line chart showing leveling of recent gain after long downward trend