The Iowa Leading Indicators Index (ILII) decreased to 105.2 in May from 105.4 in April, according to a recent report from the Iowa Department of Revenue.
The report is based on a baseline figure of 100 established in 1999.
Additionally, the monthly diffusion index decreased to 25.0 in May, compared to the previous month’s index of 37.5.
The Iowa nonfarm employment coincident index recorded a .14% percent increase in May, and long term trends in the ILII suggest that nonfarm employment will increase over the next three to six months with no contractionary signal.
During the six-month span through May, the ILII was unchanged, the report said, and the six-month diffusion index decreased to 31.3 in May from 37.5 in April.
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 index below -2% and a six-month diffusion index below 50.0.
The six-month diffusion index remained in a contractionary signal for the seventeenth month in a row, while the six-month annualized change was above a contractionary signal for the third month in a row.
The report also indicated that five of the eight component indicators decreased more than .05% over the last six months: the agricultural futures profits index (AFPI), diesel fuel consumption, new orders index, residential building permits, and initial unemployment insurance claims.
Average manufacturing hours and the Iowa Stock Market index were the only components to increase by more than .05% over the last six months, and the national yield spread increased by less than .05% over the last six months.
Only two of the eight components increased month over month in May – average
manufacturing hours and the Iowa Stock Market Index. Residential building permits, the AFPI, diesel fuel consumption, the national yield spread, the new orders index and average weekly unemployment claims were detractors from the Index.
