CHAMPAIGN, Ill. - After steady increases for much of the last year, the University of Illinois Flash Economic Index fell to 100.0 in July from a 100.3 level in June.
This rough patch in the state's economic recovery mirrors the national economy, said J. Fred Giertz, the University of Illinois economist who released the Flash data today (Aug. 2).
"The 3 percent growth of Gross Domestic Product (GDP) in the second quarter was significantly slower than the rate for the first quarter and also lower than the level predicted by most observers," Giertz said. "A 3 percent real growth rate for the economy would be good news over the long run, but a higher rate was expected during this stage of the recovery."
It is too early to say whether the state's recovery has stalled, Giertz said. There has been positive news - for example, the Chicago purchasing managers' index was up substantially in July - but the Flash Index and other indicators should be watched closely over the next few months.
State sales-tax receipts were up in real (inflation-adjusted) terms last month compared with July a year ago, while individual income-tax and corporate-tax receipts were down slightly.
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 July 31.
