The economy in Illinois continues to be headed in a positive direction, but the pace of recovery remains slow, according to a key measure of the state’s economy.
The UI Flash Index climbed to 93.8 in October, up from 93.5 in September. The improvement was considerably more modest than the 1.5 point jump between August and September and the index remains below 100, which marks the division between a growing and declining economy.
The Flash Index’s performance in recent months is consistent with the national pattern of slow recovery from the recent recession, said economist J. Fred Giertz, who compiles the monthly index for the university’s Institute of Government and Public Affairs. The reading of 93.8 is the highest since May 2009, when the index was 94.1 on its way to the recession low of 90 in September 2009.
“The recovery form the 2007-2009 recession is among the slowest on record,” Giertz said. “This has been attributed to the problems associated with the financial crisis that put unusual pressure on the economy, unlike the past two recessions that were relatively mild.”
Illinois’ unemployment rate continues to improve, falling to 9.9 percent in September. That is near the national rate of 9.6 percent.
“So despite the lingering bad economic news, there appears to be a genuine recovery in Illinois,” Giertz said. “But the state is still a year or more away from reaching pre-recession unemployment rates.”
The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income, as measured by tax collections. In real terms, individual income and sales tax collections increased from the same month last year, while corporate tax was down slightly.
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 Oct. 31, 2010.
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