U Of I Flash Index Shows Slow Economic Growth In Illinois

By Kevin Bessler, The Center Square:

The Illinois economy continued its slow recovery from the COVID-19 pandemic in January.

The University of Illinois Flash Index rose to 96.3 from its 95.9 level in December. This is well below the pre-COVID-19 level, but the highest score since March 2020. The report said January results suggest only modest gains for the economy because of the resurgence of the virus and mandated closures.

The author of the index, economist Fred Giertz from the U of I’s Institute of Government and Public Affairs, said all three components of tax receipts used in his analysis – personal income, sales and corporate taxes – were higher in January, after adjusting for inflation.

“The availability of various vaccines has yet to have a significant impact on the spread of the virus,” Giertz said. “However, many observers believe the economy is on the cusp of a major resurgence resulting from the eventual effectiveness of the vaccine program along with strong pent-up demand in the economy.”

The index dropped to around 93 last May during the height of the pandemic and has remained below 100 ever since, which means Illinois’ economy is contracting.

Although the index is a snapshot of the state’s economy and is not designed to predict the future, Giertz says there is some reason for optimism because many Illinoisans held onto stimulus money and were generally frugal.

“People actually saved a lot of that because there wasn’t too much to spend it on but now once things start to open up again, people are going to go out, travel and do a variety of things,” Giertz said.

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