Flash Index breaks 100: First sign of economic growth since 2008
The Flash Index for March increased to 101.0 from its 99.2 level last month. The Flash Index indicates whether the Illinois economy is expanding or contracting. A reading at or above 100 signifies economic growth. The index has been below 100 for the past three and a half years, reflecting a slow or stagnant economic recovery. The March results are the highest since September 2008, signifying a positive trend for the Illinois economy.
“There is nothing magic about the 100 level,” said J. Fred Giertz, who compiles the Flash Index for the Institute of Government and Public Affairs. “However, the combination of the substantial monthly increase (from 99.2 to 101.0) and the breaking of the 100 barrier is good news for the economy.”
The strong reading this month is consistent with both U. S. and Illinois economic data. The financial markets are strong and unemployment is falling both in the state and the nation. However, Illinois’ recovery is still lagging with the unemployment rate at 9 percent compared to the 8.3 percent for the nation.
Despite the good news, the recovery from the 2007-2009 recession remains anemic with very high unemployment rates at this stage of the business cycle. “It will likely be at least a year or two before unemployment rates in the 6 percent range are achieved,” Giertz said.
All three components of the index (individual income tax, corporate tax, and sales tax receipts) were up in real terms in March compared to the same month last year with the largest percentage increase registered by corporate receipts.
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