URBANA, Ill. – Illinois’ economy continues to grow at a modest rate despite a slight uptick in the unemployment rate, according to the University of Illinois Flash Index.
The index rose to 105.6 in February, up three-tenths of a point from the previous month, and well above the 100 level that marks the division between growth and decline. The slight rise reverses a two-month trend of lower readings since the index reached 106.1 in November 2015.
“The readings in the past several months suggest a somewhat slower level of growth, which is consistent with the slowing of the national economy,” said U. of I. economist J. Fred Giertz, who compiles the monthly index for the Institute of Government and Public Affairs.
The Illinois unemployment rate rose again to 6.1 percent in February compared with 6 percent the previous month and more than one percentage point higher than the national rate.
“Various reports suggest that the state budget impasse is beginning to have real consequences for the Illinois economy,” Giertz said. “Unfortunately, the Flash Index is unable to isolate these impacts, but the effect is likely to grow in future months.”
Comparisons for the individual income and corporate taxes between February 2015 and 2016 are still problematic because of the reduction in the two rates in January 2015. Last January’s tax receipts reflected a mixture of the two rates, making meaningful comparisons difficult. However, sales tax receipts 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 then calculated for the 12-month period using data through Feb. 29.
