U Of I Flash Index Indicates Growing Illinois Economy
U of I Economist Fred Giertz says Illinois is experiencing its highest economic growth in 20 months. Giertz produces the school’s monthly flash index of the Illinois economy, which rated the state at 104.7 for April 2018.
The U of I Flash Index measures the health of Illinois’ economy, with monthly records dating back to 1981. Scores greater than 100 indicate growth, and scores less than 100 indicate decline.
He says Illinois’s economy often mirrors the U.S. economy in terms of its manufacturing and agriculture.
“By far the largest driver of the Illinois economy is the nation as a whole," said Giertz. He says the state's economy is also often affected by how its government handles its budget deficit.
The economics professor says Illinois is nine years into an economic expansion. However, he says expansions do not last forever, as historically they used to last for about five to seven years. He says it can be hard to read the warning signs when the state economy is due for a decline.
“The worst recession we’ve had since World War II occurred from 2007 to 2009, and we didn’t even know we were in the recession until about a year after it actually started," said Giertz.
He says a mild recession is often connected to the Federal Reserve when it raises its interest rates to deal with inflation, resulting in less investment. He says a harsher recession is often connected to unexpected external forces that shock the economy, like the financial crisis in 2008.