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The
University of Illinois Flash Index, which uses various metrics
including corporate earnings, tax receipts and personal income
to measure the level of economic activity around the state,
dropped from 105.5 in June to 104.9 in July. A reading over 100
usually indicates growth in the economy.
“The contradictory economic indicators continue with negative
growth in the U.S. GDP the last two quarters ... and slowing
growth of Illinois tax receipts accompanied by still low
unemployment rates both nationally and in the state with a high
level of inflation,” U of I economist J. Fred Giertz said in a
online post noting the index dropped "significantly."
Giertz said that individual income tax and sales tax receipts
have not kept pace with inflation over the past three months
while corporate tax receipts remain strong.
The Federal Reserve has been tightening its monetary policy by
raising interest rates to address inflation. Supply chain issues
have been blamed for rising prices, but so has excessive
spending by the federal government.
“When we think about the genesis of the inflation crisis we are
in right now, the bottom line is the federal government spent
way too much money,” Illinois Congressman Darin LaHood said
during a recent hearing. “We have pumped $7 trillion into the
economy of taxpayer money over the last two and half years.”
The big debate is whether the economy is in a recession. A
recession is usually determined by the National Bureau of
Economic Research. Recessions are often defined after two
consecutive quarters of negative growth. Preliminary statistics
show that is what occurred in the U.S.
William Polley, economics professor at Western Illinois
University-Quad Cities, said economic uncertainty will linger
for sometime.
“By the time we get into 2023, things will start to improve on
the inflation front, but the risk of recession is still there
and probably will be with us for another year or so,” Polley
said.
Kevin Bessler reports on statewide issues in
Illinois for the Center Square. He has over 30 years of
experience in radio news reporting throughout the Midwest.
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