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* 10:55 am - Some very slightly good state economic news for a change…
The University of Illinois Flash Index, the first barometer of the Illinois economy each month, broke a six-month slide with a slight increase in January.
The index rose to 103.8 from the December reading of 103.6. It’s the first time since June 2007 that the Flash Index has risen over the previous month.
“In most months, this would be a relatively insignificant result,” said U of I economist J. Fred Giertz, who compiles the index for the university’s Institute of Government and Public Affairs. “However, with the threat of a looming recession, this is a case of ‘no news is good news.’ As of now, the Illinois economy does not appear to be in recession.”
The Flash Index is constructed with the reading of 100 as the dividing line between economic expansion and contraction. The Illinois economy has slowed significantly since June’s reading of 106.8, but it is still expanding, Giertz said.
* 3:54 pm - Judge won’t dismiss Blagojevich’s suit against Madigan on special sessions…
Sangamon County Judge Leo Zappa Friday refused to dismiss a lawsuit filed by Gov. Rod Blagojevich against House Speaker Michael Madigan over the governor’s authority to set both the date and time of special sessions.
Instead, Zappa told attorneys to quickly file additional paperwork so he can render a decision in the case. Attorneys for both sides said they hope to have a decision within weeks.
Blagojevich sued Madigan because the speaker last summer convened a special session hours earlier than decreed by the governor. Blagojevich said the action violated both the state Constitution and state law which gives the governor authority to decide when to convene special sessions.
Madigan said Blagojevich called special sessions at inconvenient times just to punish lawmakers for not approving his legislative agenda. Madigan’s legal counsel David Ellis also said that a ruling in Blagojevich’s favor will result in a lawsuit being filed any time the House is even minutes late in meeting the governor’s deadline.
posted by Rich Miller
Friday, Feb 1, 08 @ 10:57 am
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In a lot of ways the economics problem of the United States as a whole of been overstated, yes the financial markets have been nuts for the last month but the damage to the over all economy has been pretty minimal from the sub-prime fall out. In many ways the bigger danger is the Fed going over board with cutting the interest rate and Washington using this as an excuse to increase spending even more raising inflation. Illinois economy is very close to that of the overall US economy so if its not doing great, but not terrible either it probably means the nation as a whole is doing about the same.
Comment by RMW Stanford Friday, Feb 1, 08 @ 11:05 am
Does their report take into consideration the nearly $2 billion in unpaid liabilities that the State of Illinois owes? Probably not, but it’s hard to say the economy in Illinois is doing alright in spite of the state government’s fiscal condition. Such an argument would lend discussion to the notion that what happens in Springfield (excuse me, Chicago) doesn’t impact the economy. If there’s any silver lining in this report, it’s that the lack of passage of GRT and the other hairball ideas means the GA (not the Governor) has helped to maintain a healthy economy in spite of the Governor.
Comment by dc Friday, Feb 1, 08 @ 11:07 am
It good news, and I am very pleased. Why it happened, I don’t know - but it is good news!
Comment by VanillaMan Friday, Feb 1, 08 @ 11:18 am
I’m guessing this is the impact of a cheap dollar for exports.
Comment by Bill Baar Friday, Feb 1, 08 @ 11:28 am
RMW Stanford -
You are absolutely correct. Too many times these “the sky is falling” economic reports take on a life of their own because they are media driven and based on very minor data. When you people see it regularly as the lead story on the news or as a headline almost daily in the papers, they begin to buy into the bologna. IMO, the media has caused some minor economic blips through their incessant coverage.
On the bright side, Rod can have a Sunday press event to brag about how he stimulated the Illinois economy. Ugh!
Comment by Dirty Bath Water Friday, Feb 1, 08 @ 11:30 am
The Fed has not handled this well particularly with there surprise over night cut in the interest rates, regardless of whether or not it was need, the Fed went about it in away that was going to cause problems in financial markets. Stock values are based by in large off expected future returns which in turn those expectations are largely based off what people thing the economy is going to do in the future, and a surprise closed door decision to cut interest rates like send a single that we enter a major economic downturn, even if we arent, which is the case this time.
Comment by RMW Stanford Friday, Feb 1, 08 @ 11:39 am
When things hit bottom, they tend to bounce a couple times. Hopefully we will see only one bounce and things will start to improve. Still, there is a huge financial crisis afoot with Home Equity lending the next shoe to fall. Then the credit card debt crisis. The good news is a new governor will lighten the load!
Comment by Justice Friday, Feb 1, 08 @ 12:35 pm
Whether the economy of Illinois is doing well overall is an entirely different matter from whether the economy in your own community is doing well — which at the end of the day, is all that really matters to you.
Remember, if you stick your head in an oven and your feet in a bucket of ice, on the average, you’ll feel fine.
Comment by Bookworm Friday, Feb 1, 08 @ 12:56 pm
Thats a legitimate point, the economies of different communities in the same state can vary greatly depending on local conditions. Overall it is still good news, can’t wait to see the Governor try and take credit for it.
Comment by RMW Stanford Friday, Feb 1, 08 @ 1:03 pm
The U of I Flash Index is not very accurate. The index use the monthly income and sales tax data. In January the BIMP legislation took effect which reduced the allocation of income taxes to the Refuind Fund. As a result, over $100 million in income taxes was transferred by a revenue reversal from the Income Tax Refund fund to the General Funds. This change probably increased the index.
Comment by analyst Friday, Feb 1, 08 @ 2:27 pm
A two tenths change either way is probably an anomaly. People should read the Commission on Government Forecasting and Accountability (COGFA) reports for a decent read on the economy in Illinois. They are showing problems on the horizon with corporate receipts and sales taxes being the main problems. This is a pretty good indicator of issues the economy in Illinois will have around the corner. Add in that new housing starts have been off on average 30% from June on and we can see Illinois will have some revenue problems this coming year.
http://www.ilga.gov/commission/cgfa2006/Upload/1207revenue.pdf
Comment by Just Asking Friday, Feb 1, 08 @ 2:50 pm