NEWS INDEX 2001 December

The UI Flash Economic Index fell slightly in November

Mark Reutter, News Bureau
(217) 333-0568; mreutter@uiuc.edu

12/4/01

NOTE TO EDITORS AND NEWS DIRECTORS: For the first time in more than eight years, the Flash Index fell below 100 (the dividing line between growth and decline) in March 2001 and has remained below 100 except for the month of April. March 2001 is the date established last week by the National Bureau of Economic Research as the official start of the current national recession.

CHAMPAIGN, Ill. — The University of Illinois Flash Economic Index fell slightly in November to 98.0 from its October level of 98.4. This reflects continued sluggish economic conditions in Illinois.

As noted last month, the Index has not registered a significant decline in the wake of the terrorist attacks of Sept. 11. Rather, the November reading reflects the continuing slowdown that predates the attacks by six months, said J. Fred Giertz, the UI economist who released the UI data today (Dec. 4).
A year ago in November, the Flash reading was 101.9.

The Illinois economy, as measured by the Flash Index, has closely paralleled the national economy during the last year. "So far," Giertz said, "the recession has been mild and there is hope for a modest rebound in the first half of 2002. Inflation is under control and the Federal Reserve has taken quick and decisive action in cutting interest rates. However, definitive signs of a recovery either in Illinois or the nation have yet to appear."

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 Nov. 30.