UI Flash Index Rebounds a Bit—But Economist says “Whoa

A monthly gauge of the Illinois economy has made a bit of a rebound.

But the University of Illinois Flash Index cautions about putting too much into an October reading that jumped seven tenths of a percent above the previous month. Economist Fred Giertz says the first substantial improvement in the index in two years is evidence of an improving economy. But he says future months may show a much slower recovery, especially if employment doesn't rebound as well.

"Productivity has been increasing even during the downturn, so when demand starts going up again and people start buying more things it's going to take awhile before we start hiring back a lot of people because firms have become more productive, more efficient in the interim," Giertz said. "They don't need as many people as they used to, so it takes a little bit longer."

The Flash Index measures tax revenue each month from corporations, income and sales. Any number over 100 indicates economic growth - the October index came in at 90.7.