By CBJ News Staff
news@corridorbusiness.com
The Iowa Leading Indicators Index (ILII), used by state officials to forecast tax revenues, decreased 1.7% to 101.3 in April from 103.1 in March. This is the second largest one-month decrease in the history of the ILII, behind March’s 3% decrease. With only one of the eight components contributing positively, the monthly diffusion index decreased to 18.8 in April from 31.3 in February.
The Iowa non-farm employment coincident index recorded a 1.02% decline in April, the fifth month in a row of decline and the largest one-month decline in the history of the Iowa non-farm employment coincident index. With the six-month diffusion index remaining unchanged at 37.5, the annualized six-month ILII change value of -10.7% and the decline in the Iowa non-farm employment coincident index strongly suggest the Iowa economy will weaken through the fourth quarter FY 2020 and first quarter FY 2021. This report suggests that employment growth will weaken over the next three to six months.
Only one of the eight components were positive contributors to the ILII in April, diesel fuel consumption. Taxable diesel gallons were 61.01 million gallons in April, 2.4% higher than the 59.56 million gallons recorded for April 2019. The 12-month moving average of diesel fuel consumption increased to 63.04 million gallons in April from 62.91 million in March. Diesel fuel consumption, a measure of semi-truck traffic within and across Iowa, was a positive contributor for the 17th time in the last two years, indicating growing demand for the transport of manufacturing inputs and final products and agricultural commodities.
Average weekly unemployment claims (inverted), the new orders index, average manufacturing hours, the agricultural futures profits index (AFPI), the Iowa stock market index, residential building permits and national yield spread were the components that contributed negatively to the index. The 12-month moving average of weekly unemployment insurance claims increased to 7,815 in April from 6,113 in March. Average monthly claims were up 1,356% from last April, and 991% above the monthly historical average (1988-2019). The 30,313 average weekly unemployment claims for the month of April was 25.8% lower than that of March’s 40,835 average weekly unemployment claims.
The monthly Iowa Leading Indicators Index report is available on the department’s website. CBJ
