The Iowa Leading Indicators Index (ILII) remained at 105.2 in February, unchanged from November 2023, December 2023, and January 2024, according to a report from the Iowa Department of Revenue.
The monthly diffusion index increased to 62.5 in February from a revised 56.3 in January. The Iowa nonfarm employment coincident index recorded a .09% increase in February. Long-term trends in the ILII suggest that nonfarm employment will decrease over the next three to six months, according to the report.
The ILII was created 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.
The six-month diffusion index remained in a contractionary signal for the fourteenth month in a row, and the six-month annualized change showed contraction for the thirteenth month in a row.
Five of the eight component indicators decreased more than .05% over the last half-year: the agricultural futures profits index (AFPI), diesel fuel consumption, new orders index, residential building permits, and initial unemployment insurance claims.
Average manufacturing hours, the Iowa Stock Market Index, and the national yield spread were the only components to increase by more than .05% over the last six months.
Average weekly manufacturing hours was the strongest positive contributor to the Iowa Leading Indicators Index in February 2024. For average weekly manufacturing hours, the 12-month moving average increased to 39.66 in February from a revised 39.53 in January.
In February, average hours were 40.5, around a quarter hour below the historical monthly average from 1996-2023.
Average weekly manufacturing hours and the AFPI went from detractors in January 2024 to contributors to the Index in February. The new orders index and diesel fuel consumption went from contributors in January 2024 to detractors in February 2024.
The largest detractor to the index was diesel fuel consumption. Diesel fuel consumption decreased 12.4% between February 2023 and February 2024. The 12-month moving average decreased to 64.14 million gallons in February, from 64.83 million in January.
