CHAMPAIGN, Ill. After rebounding in April, the University of Illinois Flash Index experienced a steep decline in May and was again below the 100 mark, indicating that the Illinois economy is essentially stagnant, if not shrinking.
The Flash Index fell to 98.9 in May from its previous months level of 101.3. The May reading was below the March level of 99.7, which was the first sub-100 Flash reading in almost a decade. A year ago in May, the Index stood at 103.1.
All components of the Index were relatively weak, but corporate tax receipts were especially anemic, according to J. Fred Giertz, a UI economist who released the Flash Index today (June 1). The Index has shown a steady decline in economic growth since last September, except for the rebound in April.
“Although there are some encouraging signs that we may have avoided a recession, the game is not over yet,” Giertz said. “The issue is still in doubt, although most analysts believe that we will experience a period of slow growth, but not a recession, in future months.” A recession is defined as two quarters (six months) of negative growth.
The Flash Index is a weighted average of growth rates in sales-tax receipts, individual income-tax receipts and corporate earnings in Illinois. The growth rate for each component is then calculated for the 12-month period using data through May 31.
Any reading over 100 means that the state economy is expanding, and any number below 100 that the economy is contracting.
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