Following a year of declines – the state’s economic growth rate increased last month, albeit slightly.
The Flash Index issued by the University of Illinois Institute of Government and Public Affairs rose from January’s 103.1 to 103.4 in February. The Index had recently reached its post-pandemic peak of 106.1 in March of 2022. Any Flash Index number above 100 indicates economic growth.
Economist Fred Giertz compiles the index. His larger focus is if the state and the nation can avoid a recession.
“I think there is some consensus now that if there is a recession, it won’t be as deep as it might have been,” said Giertz. “The fear of a really deep recession is receding now.”
The Flash Index is based on monthly revenues from Illinois taxes, which Giertz says are stronger than a year ago, even when adjusted for inflation.
Giertz says Illinois’ slower economic growth is following a trend in the national economy. One big difference, he says, is Illinois’ unemployment rate.
“The U-S has one of the lowest unemployment rates in recorded history,” said Giertz. “But Illinois has been somewhat higher than that, but still low by historical measures.”
The unemployment rate in Illinois for December was 4.7%, compared to a national rate of 3.5%, according to the Illinois Department of Employment Security.
Giertz says the big question now is whether Illinois and the nation can avoid a recession, as the Federal Reserve tries to curb inflation with higher interest rates.
He says more economists now believe that any recession will be less severe than once feared.