URBANA — The University of Illinois flash index for January climbed to its highest level in almost five and a half years.
The indicator of economic growth in Illinois increased to 104.9, up from its 104.6 level in December. The last time the index was at this level was in August 2007, several months before the recession began.
The UI flash index has made slow progress since March 2012, when it broke through the 100 level, which is the dividing line between growth and decline, according to the university. The reading for January continues this trend. However, this month's strong performance of the index runs counter to recently released data that shows the national economy experienced a slight decline in gross domestic product in the last quarter of 2012.
"This was attributed in part to the effects of Hurricane Sandy and a sharp decline in defense spending," said UI economist Fred Giertz, who compiles the flash index for the Institute of Government and Public Affairs.
"Neither of these factors had a major impact in Illinois, as the state is not a major beneficiary of federal defense spending," he said.
There was considerable optimism about the national economy last month, such as the strong stock market gains for January.
Two components of the index — individual income tax and corporate tax receipts — experienced strong gains in real terms compared with the same month last year while sales tax receipts were down slightly, according to Giertz.
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 Jan. 31, 2013.