The Iowa Leading Indicators Index (ILII) decreased 0.1% to 105.1 in December from 105.2 in November. During the six-month span through December, the ILII decreased 1.4%, an annualized rate of -2.8%. The six-month diffusion index remained unchanged at 25.0 in December from November.

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 diffusion index remained in a contractionary signal for the 12th month in a row, and the six-month annualized change showed contraction for the 14th month in a row.

The monthly diffusion index increased to 50.0 in December from 12.5 in November. 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.

The Iowa nonfarm employment coincident index recorded a 0.05% increase in December.

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

The 12-month moving average of average weekly manufacturing hours increased to 39.52 in December from a revised 39.41 in November. Average hours for December were 40.1, above the 38.8 hours in December 2022, and just an hour and a half below the historical monthly average.

During December, 21 of the 28 Iowa-based or Iowa-concentrated publicly traded companies on the Iowa Stock Market Index gained value, and 10 of the 10 financial-sector companies increased. With over two-thirds of the stocks experiencing gains, the stock market index increased to 118.86 in December from 112.93 in November.

Residential building permits were 860, up from 711 last year. The 12-month moving average increased to 898 in December from 885 in November. December permits were 21.0% above December 2022, and 23.8% above the monthly historical average.

The new orders index in December decreased to 45.7 from 46.6 in November. The 12-month moving average of the new orders index has increased to 49.9 from 49.3 in November 2023.

In December, the 12-month moving average of average weekly unemployment claims increased from 2,136 to 2,195. Unemployment claims were 16.6% above December 2022 claims, but 24.6% below average historical claims for December.

Diesel fuel consumption decreased 5.0% between December 2022 and December 2023. The 12-month moving average decreased to 64.59 million gallons in December from 64.88 million gallons in November.

The agricultural futures profit index showed expected profit decreases in both crop commodities and both livestock commodities. Compared with last year, new crop corn prices were 21.7% lower, while soybean prices were 8.8% lower. The December crush margin for hogs decreased 0.1% from November while the crush margin for cattle decreased 2.6%.

During December, the yield spread widened and remained in inversion territory (below 0) at -1.42% from -1.02% in November. December is the 14th month in a row that the yield spread has been in inversion. The long-term rate decreased 48 basis points, while the short-term rate decreased by 8 basis points.

The full report is available online.