NEWS INDEX 2001 2002 December

Flash Index indicates Illinois economy continues to stall

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

12/3/02

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

CHAMPAIGN, Ill. — The Illinois economy continues to be stalled.

The University of Illinois Flash Index of Economic Growth was 95.3 in November, down slightly from the 95.6 level recorded for October.

The Index has been between 95 and 95.6 for the last six months – consistently below the 100 dividing line between growth and contraction for the state economy. A year ago in November, the Index reading was 98.

"The results are disappointing given the recent optimism about the national economy as evidenced by the rebound of the stock market over the last six weeks," said J. Fred Giertz, the Illinois economist who released the November Flash reading today.

The Illinois tax collections that are used in the Flash Index "continue to be very sluggish," Giertz reported. All three components of the Index were down in "real"
(inflation-adjusted) terms from the same month a year ago.

While the national economy appears to have avoided a double-dip recession, the recovery is weak. The Federal Reserve Board, which last month cut interest rates to stimulate growth, predicts only slow expansion in the near term.

The 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.