NEWS INDEX Archives 2004 January

Illinois Flash Economic Index at highest level in two years

J. Fred Giertz, Institute of Government and Public Affairs
217-244-4822

Mark Reutter, Business Editor
217-333-0568

1/5/04

CHAMPAIGN, Ill. — The University of Illinois Flash Economic Index continued its rebound in December, rising to 98.0, up from 97.3 in November and 96.8 in October.

The reading – the highest since November 2001 – suggests that the Illinois economy is beginning to reflect the economic upturn that is being felt nationally. The Flash Index is within striking distance of 100, the break-even point between economic growth and contraction. The last time the Index registered above 100 was in April 2001.

As with November’s results, the Flash Index had to be adjusted to account for extra corporate tax receipts that the state received through its tax-amnesty program. December should be the last month for which amnesty will be a factor in state revenues.

Sales-tax receipts were strong for the month compared with December of last year, suggesting a better holiday buying season for retailers than has been widely reported.

One concern, however, was the relatively weak performance of personal income taxes. Individual tax receipts were down last month from those of a year ago, said J. Fred Giertz, the University of Illinois economist who released the Flash results today.

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 Dec. 31.