The Iowa Leading Indicators Index decreased 0.2% in November 2022 to 109.3, from 109.6 in October. The monthly diffusion index decreased to 37.5 in November from 62.5 in October.

The Iowa nonfarm employment coincident index recorded a 0.23% increase in November, the 20th month of growth.

During the six-month span through November, the ILII decreased 1.0%. The six-month diffusion index remained unchanged at 37.5 in November from October, September, August and July.

The ILII 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 remains in a contractionary signal, whereas the six-month annualized change is on the verge of the contractionary threshold.

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

The agricultural futures profit index showed in November that increased profits were expected in both crop commodities and both livestock commodities. Compared with November 2021, new crop corn prices were 17.1% higher while soybean prices were 14.7% higher. The November crush margin for cattle increased 4.7% from October while the crush margin for hogs increased 18.0%.

The 12-month moving average increased to 39.29 in November from a revised 39.16 in October. In November 2022, average hours were 40.2, above the 38.6 hours in November 2021, yet just under 1 1/2 hours below the historical monthly average.

During November, 18 of the 28 companies on the Iowa Stock Market Index gained value, and eight of the 10 financial-sector companies increased. With nearly three-fourths of the stocks experiencing gains, the stock market index increased to 135.01 in November from 132.97 in October.

Average weekly unemployment claims detracted from the Iowa Leading Indicators Index for the first time since February 2021. The 12-month moving average of claims increased slightly from 1,810 in October to 1,830 in November. Unemployment claims were 9.51% above November 2021 claims, yet 33.5% below average historical claims for November.

The new orders index in November 2022 decreased sharply to 47.4, compared with 57.4 in October. Likewise, the 12-month moving average of the new orders index has decreased to 58.38 from 72.67 in November 2021.

In November, residential building permits were at 954, down from 1,244 last year. The 12-month moving average also decreased to 1,060 in November from 1,084 in October. November 2022 permits were 23.3% below November 2021, and 2.8% below the monthly historical average.

Diesel fuel consumption decreased 8.6% between November 2021 and November 2022. The 12-month moving average decreased to 67.53 million gallons in November from 68.17 million in October.

The yield spread decreased during November to inversion territory (moving below 0) at -0.43% from 0.11% in October. November is the fifth month in a row that the yield spread has been below 1.0%. The long-term rate decreased 9 basis points while the short-term rate increased 45 basis points.

The full report is available online.