The Iowa Leading Indicators Index decreased 0.2 percent to 106.9 in December 2019 — the largest monthly decrease in the index since May 2019. With four of the eight components contributing positively, the monthly diffusion index increased to 43.8 in December from 37.5 in November.

The monthly report by the Iowa Department of Revenue tracks eight component indicators designed to forecast the future direction of economic activity in the state. 

The annualized six-month percentage change decreased -0.3 percent in December from -0.2 percent in November. The six-month diffusion index improved to 62.5 in December, which is the highest the six-month diffusion index has reached since October 2018. 

Five of the eight component indicators (agricultural futures profits index, diesel fuel consumption, Iowa stock market index, national yield spread, and residential building permits) experienced an increase of greater than 0.05 percent over the last half-year. The increase in the six-month diffusion index is largely due to the agricultural futures profits index experiencing an increase of greater than 0.05 percent over the last half-year for the first time since August 2019.

The Iowa non-farm employment coincident index — which measures the change in non-farm employment on a non-seasonally adjusted basis — recorded a 0.01 percent decline in December, the first month of decline since September 2017.

Despite the six-month diffusion index improving to 62.5, the negative annualized six-month ILII value and decline in the Iowa non-farm employment coincident index suggest an enhanced weakness in the Iowa economy continues, the department said.