The Iowa Leading Indicators Index decreased to 107.6 in March, down 0.7% from 108.3 in February. The monthly diffusion index decreased to 6.3 in March from 43.8 in February.

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 50.0. The six-month diffusion index and the six-month annualized change remained in contractionary signals for the third and fifth month in a row, respectively.

The Iowa nonfarm employment coincident index recorded a 0.12% increase in March, the 24th month of growth.

Only one of the eight components increased month-over-month in March: average manufacturing hours. Diesel fuel consumption, the agricultural futures profits index, the new orders index, the national yield spread, the Iowa Stock Market Index, residential building permits, and average weekly unemployment claims detracted from the index.

The 12-month moving average of weekly manufacturing hours increased to 39.35 in March from a revised 39.34 in February. In March, average hours were 39.2, above the 39.1 hours in March 2022, yet just over an hour and a half below the historical monthly average.

In March, the 12-month moving average of average weekly unemployment claims increased from 1,812 to 1,823. Unemployment claims were 8.78% above March 2022 claims, yet 60% below average historical claims for March.

Residential building permits were 1,048 in March, down from 1,083 last year. The 12-month moving average decreased to 1,043 in March from 1,046 in February. March permits were 0.3% below March 2022, and 1.0% below the monthly historical average.

During March, the yield spread decreased and remained in inversion territory (below 0) at -1.20% from -1.04% in February. March is the fifth month in a row that the yield spread has been in inversion. The long-term rate decreased 9 basis points while the short-term rate increased 7 basis points.

The new orders index in March increased to 56.6 compared to 55.7 in February. However, the 12-month moving average of the new orders index has decreased to 53.26 from 69.13 in March 2022.

During March, only three of the 28 companies on the Iowa Stock Market Index gained value, and none of the 10 financial sector companies increased. With nearly all of the stocks experiencing losses, the stock market index decreased to 121.28 in March from 132.98 in February.

The agricultural futures profit index showed expected profit decreases in both crop commodities and livestock commodities during March. Compared with last year, new crop corn prices were 13.2% higher while soybean prices were 9.9% lower. The March crush margin for cattle decreased 13.0% from February while the crush margin for hogs decreased 3.0%. The crush margin involves the market value of the animal minus its initial cost and the cost of feeding it.

Diesel fuel consumption decreased 18.1% between March 2022 and March 2023. The 12-month moving average decreased to 66.54 million gallons in March from 67.37 million in February.

The full report is available online.