URBANA, Ill.— The U of I Flash Index remained steady in August despite volatility in the national and international stock markets. The index fell slightly to 106.5 in August from its 106.6 level in July. The index has remained in a narrow range for more than two years, reflecting steady but unspectacular growth. (See full archive.)
The basic indicators of the national and Illinois economy were strong with low levels of unemployment and inflation. In fact, inflation has been below the target set by the Federal Reserve, which has complicated its goal of eventually raising interest rates. Second quarter gross domestic product growth was recently revised upward to 3.7 percent after a slow first quarter.
To date, the ongoing state budget impasse has had no clear effect on the state economy.
However, there is considerable concern that the turmoil in the financial markets related to the Chinese economy may spill over into the U.S. economy.
“It is interesting to note that while China is considered an economic threat by many politicians, a weakening Chinese economy is now creating problems for the U.S. and world economy,” said J. Fred Giertz, professor emeritus at the University of Illinois Institute of Government and Public Affairs. Giertz compiles the Flash Index each month for the institute.
After adjustments for the new individual and corporate tax rates, individual income tax and corporate tax receipts and sales tax revenue were up slightly in real terms from the same month last year.
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 August 31, 2015.