The Iowa Leading Indicators Index (ILII) remained unchanged at 109.6 in August from July 2022, according to the Iowa Department of Revenue.
The monthly diffusion index increased to 50.0 in August from 25.0 in July. The Iowa nonfarm employment coincident index rose 0.21% in August, the seventeenth month of growth.
The ILII was constructed to signal economic turning points with two key metrics that when seen together are considered a signal of a coming contraction: a six-month annualized change in the the index below -2.0% and a six-month diffusion index below 50.0. The six-month diffusion index remained unchanged at 37.5 in August from July, aligning with a contraction signal. However, the annualized six-month ILII change value was -0.9%, still above the contraction signal.
- The Iowa Stock Market Index was the strongest contributor to the ILII in August. Capitalization-weighted index of 28 Iowa-based or Iowa-concentrated publicly-traded companies. During August 2022, 20 of the 28 companies gained value, and seven of the 10 financial-sector companies increased. With over two-thirds of the stocks experiencing gains, the index increased to 129.08 in August from a revised 117.94 in July.
- The Iowa Stock Market Index, Diesel Fuel Consumption, and Residential Building Permits went from negative contributors in July 2022 to positive contributors in August 2022, while the Agricultural Futures Profits Index went from a positive contributor to a negative contributor.
- The largest detractor from the index in July 2022 was the National Yield Spread. Difference between the yield on 10-year Treasury bonds and 3-month Treasury bills. During August, the yield spread decreased to 0.18% from 0.60% in July. August is the second month in a row since December 2020 that the yield spread has been below 1.0%. The long-term rate remained unchanged while the short-term rate increased 42 basis points.
For more on the report, visit the Iowa Department of Revenue website.