CHAMPAIGN, Ill. - The U of I Flash Index rebounded strongly in August, reaching 100.5. Last month's reading was 100.0. The current index level is the highest since April 2001.
The strong performance in August ends a period during which the index had hovered around the 100 barrier since breaking through the barrier in April of this year. Readings above 100 indicate a growing economy; readings below 100 indicate a shrinking economy.
"The current higher reading comes at a time when there are contradictory signs about the national economy," said J. Fred Giertz, the U. of I. economist who compiles the monthly index. "Consumer confidence fell in July and the GDP numbers were revised downward slightly for the second quarter while expectations about job growth and sales are strong for the remainder of the year, according to a Business Roundtable report."
The results of all three components of the index were unambiguous in August with individual income-tax, corporate-tax and sales-tax receipts all up in real terms compared with the same month a year ago.
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.