June 1, 2015 _ The Illinois economy continues to grow at a steady pace, but a key indicator of the rate of growth indicates that growth slowed slightly in May. The University of Illinois Flash Index dipped to 106.5 last month from its 107.1 reading in April. The April reading was the highest in 15 months.
“This is a distinct decline that places the index near the middle of the 106.0-107.2 range that it has occupied for the last two years,” said economist J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs. “This does not mean that the Illinois economy is not growing since 100 is the dividing line between growth and decline. Rather, it suggests steady moderate growth that has marked the slow recovery from the 2007-2009 recession,” Giertz said.
The expanding economy has finally had significant impact on the unemployment rate, which has fallen to 6 percent compared to 7.4 percent a year ago, Giertz said. However, that is tempered by slow growth in Gross Domestic Product and employment compared to recoveries from past recessions. It’s unlikely that the annual GDP growth rate will break past the 2-3 percent range again this year.
After adjustments for new individual and corporate tax rates, individual income tax receipts were down significantly in May, while both corporate and sales tax revenue was up slightly in real terms from May 2014.
The Flash Index is a weighted average of Illinois growth rates in corporate earnings, consumer spending and personal income. Tax receipts 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 May 31, 2015.