The Iowa Leading Indicators Index decreased to 105.2 in May from a revised 105.4 in April.

The monthly diffusion index decreased to 25.0 in May from 37.5 in April. 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.

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 when seen together.

The six-month annualized change remained above contractionary signals for a third consecutive month as the index was unchanged during the six-month span through May, resulting in an annualized rate of 0.0%.

The six-month diffusion index decreased to 31.3 in May from 37.5 in April, staying in contractionary signals for the 17th month in a row.

The Iowa nonfarm employment coincident index recorded a 0.14% increase in May.

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

The 12-month moving average of average weekly manufacturing hours rose to 39.94 in May from a revised 39.78 in April. Average hours were 41.1 in May, just over the historical monthly average.

In May, 17 of the 27 Iowa-based or Iowa-concentrated publicly traded companies gained value and all nine of the financial sector companies increased. The stock market index increased to 135.2 in May from a revised 133.15 in April due to nearly two-thirds of the stocks experiencing gains.

The 12-month moving average of average weekly unemployment claims increased from 2,416 to 2,419. Unemployment claims were 2.0% above May 2023 claims, but 35.6% below average historical claims for May.

The new orders index in May dropped to 48.1 from 59.3 in April. The 12-month moving average of the new orders index decreased to 48.6 from 48.9 in April.

During May, the yield spread remained in inversion territory (below 0) at -0.98%, down from -0.90% in April. May is the 19th month in a row that the yield spread has been in inversion. The long-term rate decreased 6 basis points while the short-term rate increased by 2 basis points.

Diesel fuel consumption decreased 5.2% between May 2023 and May 2024. The 12-month moving average decreased to 64.55 million gallons in May from 64.84 million in April.

In May, the agricultural futures profit index showed expected profit decreases in both crop commodities and expected profit decreases in hogs while live cattle had an expected profit increase. Compared with last year, new crop corn prices were 10.6% lower while soybean prices were 1.2% lower. The May crush margin for cattle increased 11.6% from April while the crush margin for hogs decreased 5.5%.

Residential building permits were 849 in May, down from 1,327 last year. The 12-month moving average decreased to 868 in May from 908 in April. May 2024 permits were 36.0% below May 2023, and 26.3% below the monthly historical average.

The full report is available online.