NEWS INDEX 2001 2002 October

Monthly economic index suggests static state economy

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

10/1/02

EDITORS, NEWS DIRECTORS: The Flash Index of Economic Growth, produced by economists at the University of Illinois, is based on the most up-to-date information on the Illinois economy.

CHAMPAIGN, Ill. — The University of Illinois Flash Economic Index remained at 95.4 in September for the third straight month. This suggests that the Illinois economy continues to be in a no-growth situation, much like the national economy.

"Favorable economic news is offset by negative information – for example, the Illinois unemployment rate fell in August – but this was countered by reports of weak September sales and a decline in the Chicago purchasing index," said J. Fred Giertz, the economist at the University of Illinois who released the Flash Index results today.

A year ago in September, the Flash Index was at 98.2.

Much of the current malaise can be traced to the lagging stock market. "The underlying economy appears much stronger than the stock market would suggest, but the market’s poor performance is affecting both consumer confidence and purchases," Giertz said.

Retail sales in Illinois were up slightly for the month. This small gain must be viewed as disappointing compared with September 2001, which included the impacts of the Sept. 11 terrorist attacks. Corporate tax receipts were unchanged from a year ago, and individual income tax receipts were down slightly.

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 Sept. 30.