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Flash Index sinks to lowest level in decade
Mark Reutter, News Bureau
(217) 333-0568; mreutter@illinois.edu
5/1/2002
EDITORS:
The Flash Index of Economic Growth, produced by economists at the University
of Illinois at Urbana-Champaign, is based on the most up-to-date information
on the state economy.
CHAMPAIGN, Ill. — The University of Illinois Flash Index dropped
again in April to 95.0 from its 96.3 level in March. This is the lowest
reading of the Index since February 1992.
The Index, which charts the state of the Illinois economy, provides
no comfort for those looking for signs that the recession is at an end.
Last month’s number marks the 12th straight month that the Index
has been below 100, indicating a contraction of the state economy. A
year ago in April, the Index was 101.3, indicating modest growth.
"There have been mixed economic signals of late regarding the national
economy," said J. Fred Giertz, an economist who released the Flash
data today. "The first-quarter Gross Domestic Product showed strong
growth, but there is concern that the expansion has already stalled."
It should be noted that the Flash Index is a composite measure of the
state’s economic performance and is not designed to track personal
income or output directly. "The inclusion of corporate tax receipts
in the Index makes it more volatile than income or output," Giertz
said. "But it also gives a better picture of the state’s economic
momentum than these more stable measures."
The performance of the Index is consistent with the state revenue picture
where tax receipts have been very weak for the last few months. In the
recession in the early 1990s, the Flash Index remained below 100 for
nearly three years. This suggests that it will take sometime for the
Index to move back to 100, possibly several months after the actual
recession (as officially determined) ends.
The Flash Index is a weighted average of Illinois growth rates in corporate
earnings, consumer spending and personal income. The growth rate for
each component is calculated for the 12-month period using data through
April 30.
