The Iowa Leading Indicators Index (ILII), used by state officials to forecast tax revenues, increased to 108.5 in May from 107.7 in April. May is the 10th month in the past 11 months that the index has increased.Â
With six of the eight components contributing positively, the monthly diffusion index remained unchanged at 87.5 in May, from a revised 87.5 April. May marks the 10th month in a row that the monthly diffusion index has registered at or above 50. The ILII has returned to its pre-pandemic level (February 2020) and has surpassed the previous high of 108.4 in January 2018. The COVID pandemic caused the ILII to drop as low as 103.2 in June 2020 before sharply recovering to the new current high.
Seven of the eight component indicators (agricultural futures profits index, average weekly unemployment claims (inverted), diesel fuel consumption, the Iowa Stock Market Index, the national yield spread, the new orders index, and residential building permits) experienced an increase of greater than 0.05 percent over the last half-year.
Six of the eight components increased in May: the new orders index, average weekly unemployment claims (inverted), the agricultural futures profits index, diesel fuel consumption, the Iowa Stock Market Index, and average manufacturing hours. The May 2021 monthly value of the new orders index decreased to 72.7 from 79.7 in April, yet was substantially higher than the May 2020 value of 31.1. The 12-month moving average of the new orders index increased to 73.5 from 70.
