CHAMPAIGN, Ill. -- The University of Illinois Flash Economic Index dropped again in January to 101.3 from its 101.8 reading in December.
"This confirms that the Illinois economy is in a definite slowdown," said J. Fred Giertz, a UI economist who released the Flash Index today (Feb. 2). The Index indicates that the state economy is still growing, but at its lowest rate in more than eight years. "
In Illinois and nationally, the concern is whether the slowdown will lead to a downturn or a recession," Giertz said.
Although a recession "is still unlikely," it cannot be ruled out, Giertz added. A recession is defined as two consecutive quarters (six months) of decline in economic activity.
Corporate tax receipts were down in inflation-adjusted terms in January, while both personal income tax and sales-tax collections were nearly constant. A year ago in January, the Index was 102.2, almost a full point higher.
The Flash Index is a weighted average of growth rates in sales-tax receipts, individual income-tax receipts and corporate-earning receipts in Illinois. The growth rate for each component is then calculated for the 12-month period using data through Jan. 31.
Any reading above 100 means the state economy is expanding, while any number below 100 indicates economic activity is declining.