The Iowa Leading Indicators Index decreased to 105.0 in June 2024 from 105.2 in May.

When seen together, a six-month annualized change in the index below -2.0% and a six-month diffusion index below 50.0 are considered a signal of a coming contraction.

The six-month diffusion index increased to 50.0 in June from 31.3 in May, the first month since December 2022 that it was not in contractionary signals.

During the six-month span through June, the Iowa Leading Indicators Index decreased 0.2%, which is an annualized rate of -0.3%. The six-month annualized change remained above contractionary signals for the fourth month in a row.

The monthly diffusion index increased to 37.5 in June from 25.0 in May. A diffusion index measures the proportion of components rising in a given time period. Components are assigned values based on how they increased or decreased over the time period and the assigned values for all the components are then added together.

The Iowa nonfarm employment coincident index recorded a 0.12% increase in June. This index is computed using a complex computation based on the Conference Board’s Leading Indicators Index.

Three of the eight components increased month over month in June: average manufacturing hours, diesel fuel consumption and the new orders index. The agricultural futures profit index, the national yield spread, the Iowa Stock Market Index, average weekly unemployment claims, and residential building permits detracted from the index.

The 12-month moving average of weekly manufacturing hours increased to 40.03 in June from 39.94 in May. In June, average hours were 40.2, just over an hour below the historical monthly average.

Diesel fuel consumption increased 2.8% between June 2023 and June 2024. The 12-month moving average increased to 64.70 million gallons in June from 64.55 million in May.

The new orders index in June increased to 54.7 from 48.1 in May. The 12-month moving average of the new orders index increased to 48.8 from 48.6 in May.

In June, residential building permits were at 1,061, down from 1,115 last year. The 12-month moving average decreased to 864 in June from 868 in May. June 2024 permits were 4.8% below June 2023, and 11.4% below the monthly historical average.

The 12-month moving average of average weekly unemployment claims increased from 2,419 to 2,485. Unemployment claims were 46.3% above June 2023 claims, yet 21.8% below average historical claims for June.

Four of the 27 Iowa-based or Iowa-concentrated publicly traded companies gained value, and only one of the nine financial-sector companies increased during June. With nearly all of the stocks experiencing losses, the index decreased to 129.8 in June from 135.2 in May.

The yield spread remained in inversion territory (below 0) in June at -1.20%, down from -0.98% in May. June is the 20th month in a row that the yield spread has been in inversion. The long-term rate decreased 17 basis points while the short-term rate increased by 5 basis points.

During June, the agricultural futures profit index showed expected profits decreases in both crop commodities and both livestock commodities. Compared with last year, new crop corn prices were 17.9% lower while soybean prices were 9.7% lower. The June crush margin for cattle decreased 12.0% from May while the crush margin for hogs decreased 6.0%.

The full report is available online.