NEWS INDEX Archives 2004 May

Flash Index of Illinois Economy breaks 100 barrier for first time in three years

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

Mark Reutter, Business & Law Editor
217-333-0568; mreutter@uiuc.edu

5/3/04

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. — After three years, the University of Illinois Flash Economic Index has broken through the 100 level, the dividing line between a sluggish and vigorous economy.

April’s reading of 100.3 suggests that the Illinois economy is undergoing a sustained expansion. This was the first time the Flash Index has been above 100 since April 2001. A year ago in April, the index was at 96.0

"There are numerous signs of growth in the state and national economy," said J. Fred Giertz, the University of Illinois economist who released the data today (May 3).

"One sign is the growth of corporate profits reported in the first quarter," Giertz said. "Another is the shift by stock market investors from a concern about a lackluster economy to a fear that interest rates will rise because of the strength of the economy."

All three components of the Flash Index were up compared with the same month last year. Individual and corporate income-tax receipts were especially strong last month.

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 April 30.