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The Flash Index fell to 105.5 in December from its 106.1 level in November. This is not only the lowest reading all year, but the lowest reading since March 2013. The Illinois economy is still growing, as the reading is above 100, the dividing line between growth and decline. However, this reading suggests that the state’s economy slowed considerably in the last part of 2015.
The Flash Index began 2015 strong in the high 106, low 107 range, and then hovered steadily around 106.5 all summer. In the fall and winter, the index dipped, indicating a slow down. “This suggests that the long, slow recovery from the 2007-2009 recession continues to be disappointing,” said J. Fred Giertz, who compiles the index for the Institute of Government and Public Affairs.
Another possible factor contributing the slow down: the political showdown over the budget. “While the decline of the index this month cannot be definitively attributed to the state’s ongoing budget stalemate, it is likely that it is beginning to have an impact,” Giertz said.
State unemployment ticked upward by 0.3 percentage points to 5.7 percent, falling further behind the national 5.0 percent rate. Nevertheless, the Illinois unemployment rate is still below the 6.2 percent rate of a year ago. National GDP grew at a modest 2.0 percent rate during the third quarter.
After adjustments for the new individual and corporate tax rates, corporate and sales tax receipts were down moderately while individual income tax revenues were up in real terms from the same month last year. The slight decline in real sales tax revenues suggests modest holiday sales.
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 December 31, 2015.
The full Flash Index archive is here.
posted by Rich Miller
Monday, Jan 4, 16 @ 12:15 pm
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“@RonSandack: I’m frustrated 2, but taking steps towards reforming IL more important than short term budget stalemate.”
Boy, The Owl frames all the pain, the lack of growth, why there are hostages better than anyone I know.
That tweet by Ron Sandack is priceless
Thanks, Owl.
Comment by Oswego Willy Monday, Jan 4, 16 @ 12:19 pm
When Fred gets up from his nap tell him the CAT layoffs and closin’ that auto plant in BN might impact the FLashers before a state budget get into the picture.
Comment by Anonin' Monday, Jan 4, 16 @ 12:24 pm
Just some more short term pain.
It’ll be gangbusters when the turnaround agenda passes. The term limits alone will jump the index 50 points.
Comment by Sir Reel Monday, Jan 4, 16 @ 12:26 pm
Thanks Rich for highlighting this article. I’m sure that the Illinois Policy Institute won’t do a piece on this.
Comment by 360 Degree TurnAround Monday, Jan 4, 16 @ 12:29 pm
Short-term working class citizen pain for long-term billionaire gain!
Comment by Precinct Captain Monday, Jan 4, 16 @ 12:35 pm
Governments have a function and should not be managed like they are ski resorts. The current administration doesn’t understand that.
Comment by VanillaMan Monday, Jan 4, 16 @ 12:39 pm
Well, this kind of works both ways for Rauner. With sluggish growth he’ll continue to have a ready made excuse for not routing some bucks to flood victims — not enough growth to help poor folks. Madigan! Unions! Pain, the short and the long of it with the long face man.
Comment by vole Monday, Jan 4, 16 @ 12:45 pm
But, but, according to Scott Reeder, Illinois is getting better!
http://www.mywebtimes.com/opinion/columnists/statehouse-reeder-better-but-that-s-not-saying-much/article_3caf4619-c168-54c3-8e7c-9453f9380921.html
Comment by G'Kar Monday, Jan 4, 16 @ 1:07 pm
The highlighted portion is speculation and there’s no data to support it. Small business owners aren’t saying, “man, if the state would pass a budget, I’d feel more certain about things and hire some new employees”. Instead, they’re saying, “these worker’s compensation rates are killing me, the real estate taxes are killing me, and now they’re talking about raising taxes again?”
Comment by econ prof Monday, Jan 4, 16 @ 1:36 pm
A budget impasse hurts the economy more than a 5% income tax rate. Who’da thunk it?
Comment by SAP Monday, Jan 4, 16 @ 2:30 pm
C’mon man, you think the layoffs, cutbacks and providers not being paid because of the impasse are helping the state’s economy?
Comment by Norseman Monday, Jan 4, 16 @ 2:50 pm
Watching for when the current Governor “owns” the state’s economic performance. Cannot be much longer now.
We can just take the anti-Quinn campaign attacks about lack of growth, and change the name.
[It’s all political illusion.]
Comment by walker Monday, Jan 4, 16 @ 3:30 pm
- walker -
===Watching for when the current Governor “owns” the state’s economic performance. Cannot be much longer now.===
Spot. On. “And…
===We can just take the anti-Quinn campaign attacks about lack of growth, and change the name.===
“… Ball Game.”
All that huffin’ and puffin’ by the Rauner Crew against Quinn has a strong possibility of bouncing back and bitin’ Rauner.
Comment by Oswego Willy Monday, Jan 4, 16 @ 3:35 pm
To paraphrase Ronald Reagan, is this state better off today than it was one year ago? The answer is a resounding no. That question will be asked again three years from now at the end of Rauner’s first term. I don’t know if the Governor even wants to serve two terms. I have doubts that he is even interested in running again. I think he’s in this to get what he can for those who are like himself, (very wealthy)at the expense of everyone else. He has done nothing in his first year to make one think otherwise. If he does run again things better change significantly for the better in the near future.
Comment by The Dude Abides Monday, Jan 4, 16 @ 3:58 pm