The Iowa Leading Indicators Index decreased 0.5% to 107.0 in April from a revised 107.5 in March.

During the six-month span through April, the index decreased 2.1%, an annualized rate change of -4.2%. The six-month diffusion index decreased to 12.5 in April from 25.0 in March.

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 remained in contractionary signals for the fourth month in a row, whereas the six-month annualized change remained below the contractionary threshold for the sixth month in a row.

The monthly diffusion index increased to 25.0 in April from 6.3 in March. The Iowa nonfarm employment coincident index recorded a 0.12% increase in April, the 25th month of growth.

Only two of the eight components increased month over month in April: average manufacturing hours and diesel fuel consumption. The agricultural futures profit 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.

Diesel fuel consumption increased 5.8% between April 2022 and April 2023. The 12-month moving average increased to 66.88 million gallons in April from 66.54 million in March.

In April, the 12-month moving average increased to 39.35 in April from a revised 39.33 in March. Average hours were 39.30, above the 39.0 hours in April 2022 and exactly an hour and a half below the historical monthly average.

The 12-month moving average of average unemployment claims increased from 1,823 in March to 1,840 in April. Unemployment claims were 16.30% above April 2022 claims, yet 60.2% below average historical claims for April.

During April, only 12 of the 28 companies on the Iowa Stock Market Index gained value, and two of the 10 financial-sector companies increased. With fewer than half of the stocks experiencing gains, the stock market index decreased to 119.62 in April from 121.28 in March.

The new orders index in April increased to 61.0 compared with 56.6 in March. However, the 12-month moving average of the new orders index has decreased to 52.46 from 68.38 in April 2022.

The yield spread decreased and remained in inversion territory (below zero) in April at -1.61% from -1.20% in March. April is the sixth month in a row that the yield spread has been in inversion. The long-term rate decreased 20 basis points while the short-term rate increased 21 basis points.

In April, permits were 924, down from 1,580 last year. The 12-month moving average decreased to 988 in April from 1,043 in March. April permits were 5.2% below April 2022, and 25.3% below the monthly historical average.

The agricultural futures profit index detracted from the Iowa Leading Indicators Index with expected profit decreases in both crop commodities and livestock commodities. Compared with last year, new crop corn prices were 23.8% lower while soybean prices were 13.0% lower. The April crush margin for cattle decreased 14.2% from March while the crush margin for hogs decreased 7.6%.

The full report is available online.