UI flash index shows slow growth in February
URBANA — The University of Illinois flash index dropped to 106.8 in February, down from 107.2 in January, indicating the Illinois economy is growing at a slow pace.
The index, released by the UI Institute of Government and Public Affairs, is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income as measured by tax receipts.
The index has hovered in a narrow range between 106.5 and 107.2 since July 2013, demonstrating the slowness of the economic recovery in Illinois.
"The unusually harsh February weather may have also been a negative factor for the index," said J. Fred Giertz, the economist who compiles the index for the institute.
"If so, some of the loss may be captured in catch-up activities in March," Giertz said in a UI news release.
In February, individual income tax receipts were up moderately from the same month last year when adjusted for inflation. Sales tax receipts and corporate tax receipts were down slightly.
The index has remained well above 100 — the dividing point between growth and decline — for the past two years. The last time the flash index was below 100 was February 2012.
Giertz said flash index readings for March and April should be especially interesting because for the last two years, there were unusually strong individual income tax receipts generated by capital gains reported during tax-filing season.
With strong gains in the equity markets in 2013, that trend may be poised to continue, he said.
Giertz said recently revised numbers for fourth-quarter growth in U.S. gross domestic product show the economy grew slower than originally reported — by 2.4 percent, rather than by the original estimate of 3.2 percent.
That slower growth will make it more difficult to achieve progress in reducing unemployment, he said.