CHAMPAIGN, Ill. -- A continued slow down -- but not precipitous decline -- in the state economy was indicated by the December University of Illinois Flash Economic Index.
The Illinois economy ended the year with a monthly reading of 101.8, off marginally from the November figure of 101.9. A year ago in December, the Index was 102.1.
"There is no question that Illinois has slipped back from its rapid expansion of 1995-1999, but the economy is still growing and so far nothing indicates a recession," said J. Fred Giertz, a UI economist who released the Flash Index today (Jan. 3).
A recession is defined as two consecutive quarters of decline in economic activity. Countering recent trends, Illinois corporate-tax receipts in December were up in "real" (inflation-adjusted) terms, while personal income-tax collections were down slightly. The sales-tax numbers confirmed reports from retailers of a slow Christmas season.
"The key question now is whether we will achieve a soft landing,Õ as desired by the Federal Reserve Bank, or whether the slowdown will move into a recession," Giertz said.
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 Dec. 31.
Any reading above 100 means the state economy is expanding, while any number below 100 indicates the economy is declining.
