UI flash index's big increase is its first in two years
URBANA – The University of Illinois flash index rose substantially for the first time in two years, but a UI economist said it's too early to tell whether the recession is ending.
The index rose from 90 in September to 90.7 in October, said economist J. Fred Giertz, who compiles the index for the UI's Institute of Government and Public Affairs.
The index – an average of growth rates in corporate earnings, consumer spending and personal income in Illinois – had steadily declined since July 2007, when it stood at 106.8. The recession began four months later, in November 2007.
"There has been some encouraging news about the economy recently, including a return to growth for gross domestic product during the third quarter," Giertz said. "But considerable concern remains about the strength of the recovery, as evidenced by weak consumer spending."
He added that one increase in the index, though positive, "is not decisive."
During the last two years, there have been several months when the index stayed the same or rose by 0.1, 0.2 or 0.3 points. But the overall trend has been down, and there have been no increases of the magnitude of October's rise.
Corporate income-tax receipts were up in October compared with the same month in 2008, but individual income-tax receipts and sales-tax receipts were both down compared with 2008.
Generally, index readings above 100 indicate economic expansion, while readings below 100 reflect a contracting economy.
The index has been below 100 since December 2008, and the October reading was the second-lowest reading since November 1983.
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