After two consecutive months of gains, the University of Illinois Flash Index dipped slightly in January. The Flash Index dipped to 98.8 reflecting the continued sluggish pace of economic recovery in Illinois. A reading below 100 indicates contraction in the state’s economy, while readings of 100 and higher indicate the state’s economy is growing. The Index hit 99.1 last month, a post-recession high.
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Unemployment continues to be a significant drag on the economy according to U of I economist Fred Giertz, who compiles the Flash Index for the Institute of Government and Public Affairs. The state rate continues to hover near 10 percent and national employment levels remain relatively stagnant. “While the current (Flash) reading is still the second highest in over three years, it suggests that the Illinois economy is still improving very slowly,” Giertz said.
The Flash Index provides a monthly snapshot of the Illinois economy, using a weighted average of growth rates in the state’s corporate earnings, consumer spending and personal income. Tax receipts for the preceding month, adjusted for inflation, provide the data used to calculate the growth rates and the index on the first business day of each month. The growth rates for each component of the January index were calculated for the 12-month period using data through January 31, 2012.
Giertz says because January 2011 was a month of transition from old to new income tax rates, it is difficult to determine whether the January 2012 dip was the beginning of a new trend or a statistical anomaly.