Flash Index: 3rd Month Of Decline, But State Economy Still Growing
The June numbers for the University of Illinois’ Flash Index show the Illinois economy’s growth rate has fallen for two months in a row. But the economist who compiles the index isn’t too concerned.
The Flash Index measured the health of the state’s economy at 105.6 in April, 105.4 in May and 105.2 in June. Those numbers indicate that the rate at which the Illinois economy is growing has fallen back to where it was last autumn, but still above its lowest point of 104.9 in the past 12 months.
“One reason for the decline is that three months ago, there was a really large increase in tax collections in March,” said economist Fred Giertz, who compiles the Flash Index for the university’s Institute of Government and Public Affairs. “And that boosted up the Flash Index, which has sort of come back to earth now, in the last couple of months.”
Giertz compiles the Flash Index based on a weighted average of growth rates in Illinois sales, corporate and individual tax receipts, all adjusted for inflation. Sales and individual tax receipts were up in June, and all three categories were up for the fiscal year compared to the previous one.
Giertz says it’s important to remember that as long as the Flash Index stays above 100, a drop in the index number does not mean economic decline.
“The Flash Index, when it declines, it doesn’t mean the economy’s declining,” said Giertz. “It means it’s not growing quite as fast as it did previously. So right now, the economy is still moving along at this post-recession pace of two or three percent a year, which is not great, but not bad.”
Giertz says Illinois, like the nation as a whole, continues to enjoy a long, if not particularly strong, economic expansion.