The Iowa Department of Revenue has released its Iowa Leading Indicators Index for May.

The Iowa Leading Indicators Index increased to 107.1 in May from 106.9 in April. The monthly diffusion index increased to 68.8 in May from 56.3 in April. The Iowa nonfarm employment coincident index recorded a 0.05% decrease in May. The Iowa nonfarm employment coincident index has experienced decreases in eight of the last nine months. However, long-term trends in the index suggest that nonfarm employment will increase over the next three to six months, according to the Department of Revenue.

Positive indicators:

• Iowa Stock Market Index (+0.14): 22 of 27 Iowa-based public companies gained value, including all nine in the financial sector. The index rose from 146.36 to 159.75.
• Agricultural Futures Profits Index (+0.12): Livestock expected profits increased, despite decreases in crop profits. Cattle and hog margins rose significantly.
• Yield spread (+0.03): Moved out of inversion, increasing from -0.04% in April to 0.06% in May as long-term interest rates rose faster than short-term ones.
• Residential building permits (+0.03): 1,175 permits issued in May, up from 894 the previous year. Still below the historical average, but the 12-month average increased.
• New orders index (+0.01): Although the index fell in May, the 12-month average ticked up slightly.

Negative indicators:

• Unemployment claims (-0.01): Initial claims increased slightly, with the 12-month average rising to 2,592. Still well below the historical average.
• Manufacturing hours (-0.01): Average hours decreased slightly to 41.17 on a 12-month basis.
• Diesel fuel consumption (-0.08): Consumption declined 5.9% year-over-year, with the 12-month average dropping.

The index was designed to track 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.

Five of the eight component indicators increased more than 0.05% over the last half-year: average manufacturing hours, diesel fuel consumption, the Iowa Stock Market index, the national yield spread and residential building permits.

The agricultural futures profits index, initial unemployment insurance claims and the new orders index were the components to decrease by more than 0.05% over the last six months.

The Iowa Stock Market Index was the strongest positive contributor to the index in May. Diesel fuel consumption, initial unemployment insurance claims and average weekly manufacturing hours went from contributors in April to detractors in May. The new orders index, Iowa stock market index and the agricultural futures profits index went from detractors in April to contributors in May.

Diesel fuel consumption was the strongest detractor to the index in May 2025. Changes are calculated based on a 12-month moving average. Diesel fuel consumption decreased 5.9% between May 2024 and May 2025. The 12-month moving average decreased to 65.23 million gallons in May from 65.54 million in April.