The Iowa Leading Indicators Index increased to 103.8 in November 2020 from 103.5 in October, according to the Iowa Department of Revenue. November is the fourth month that the index has increased since the COVID-19 pandemic affected Iowa. The monthly diffusion index increased to 62.5 in November from 50 in October. The report suggests that employment growth will improve over the next three to six months. 

The six-month diffusion index improvement in November to 62.5 and the annualized six-month leading indicators change value of 0.9% are good indications of a positive economic turnaround despite the decline in the Iowa nonfarm employment coincident index. Five of the eight component indicators experienced an increase of greater than 0.05% over the last half-year. 

The Iowa Leading Indicators Index 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 -2.0% and a six-month diffusion index below 50.

The Iowa nonfarm employment coincident index recorded a 0.45% decline in November. Five of the eight components added to the indicators index’s monthly increase in November: the new orders index, residential building permits, diesel fuel consumption, the national yield spread and the Iowa Stock Market Index. 

• The November monthly value of the new orders index decreased to 77.8 from 82.1 in October, yet was higher than the November 2019 value of 46.8.
• Residential building permits (1,065 in November 2020) were 58% above November 2019 and 10.3% above the historical average for November.
• Taxable diesel gallons were 75.54 million gallons in November 2020, 4.8% higher than the 72.04 million gallons recorded for November 2019.
• The yield spread expanded to 0.78% from 0.69% in October.
• Twenty-one of the 31 companies in the Iowa Stock Market Index gained value in November, including nine of the 11 financial sector companies. The index increased to 82.46 in November from 80.8 in October.

The full Iowa Leading Indicators Index for November is available online.