NEWS INDEX Archives 2005 January

U. of I. Flash Index ends year on upswing, caps strong year for state economy

J. Fred Giertz, Institute of Government and Public Affairs
217-840-9148

Mark Reutter, Business Editor
217-333-0568

1/3/05

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 finished 2004 with a strong performance, rising to 103 from its 102.4 reading in November.

Last year turned out to be very good for the Illinois economy. The Flash Index stood at 98.5 last January, having been below 100 – the dividing line between economic contraction and growth – since the spring of 2001.

The Index broke the 100 mark in April, but stayed near that level until September when it reached 102.2.

The December level of 103.0 suggests that the state economy is now in full expansion mode. Illinois, however, still lags behind the nation as a whole in its performance since the 2001 recession. If recent trends continue, Illinois may begin to close the gap.

The corporate component of the Index was the strongest contributor to its growth in December, while individual income tax and sales-tax receipts were down slightly in real (inflation-adjusted) terms.

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.