The Iowa Leading Indicators Index decreased 0.1% to 109.2 in December 2022 from 109.3 in November 2022.

The monthly diffusion index remained unchanged at 37.5 in December from November. The Iowa nonfarm employment coincident index recorded a 0.18% increase in December, the 21st  month of growth.

During the six-month span through December, the Iowa Leading Indicators Index decreased 0.9%, an annualized decrease rate of 1.70%. The six-month diffusion index increased to 62.5 in December from 37.5 in November, September, August, and July.

The six-month diffusion index has exited contractionary signals whereas the six-month annualized change remains close to the contractionary threshold.

Five of the eight component indicators increased more than 0.05% over the last half of 2022: Agricultural futures profits index, average weekly unemployment claims, average weekly manufacturing hours, diesel fuel consumption and the Iowa Stock Market Index.

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

Diesel fuel consumption increased 14.1% between December 2021 and December 2022. The 12-month moving average increased to 68.24 million gallons in December from 67.53 million in November.

During December, the agricultural futures profits index showed expected profit increases in both crop commodities and live cattle, with an expected profit decrease to lean hogs. Compared with last year, new crop corn prices were 9.5% higher while soybean prices were 11.4% higher. The December crush margin for cattle increased 0.8% from November while the crush margin for hogs decreased 3.1%. The crush margin involves the market value of the animal minus its initial cost and the cost of feeding it.

There were 711 residential building permits issued in December, down from 716 in December 2021. The 12-month moving average remained unchanged at 1,060 in December from November. December 2022 permits were 0.04% below December 2021, yet 2.5% above the monthly historical average.

The 12-month moving average of average manufacturing hours decreased slightly to 39.28 in December from 39.29 in November. In December 2022, average hours were 38.8, below the 38.9 hours in December 2021, and nearly three hours below the historical monthly average.

In December, the 12-month moving average of weekly unemployment claims increased from 1,830 to 1,862. Unemployment claims were 9.97% above December 2021 claims, yet 36.8% below average historical claims for December.

The last month of 2022 saw 10 of the 28 companies on the Iowa Stock Market Index gain value, and three of the 10 financial-sector companies increased. With nearly two-thirds of the stocks experiencing losses, the stock market index decreased to 130.16 in December from 135.01 in November.

The yield spread fell further into inversion territory (moving below zero) at -0.74% in December from -0.43% in November. December is the sixth month in a row since December 2020 that the yield spread has been below 1.0%. The long-term rate decreased 27 basis points while the short-term rate increased 4 basis points.

The new orders index decreased sharply in December to 38.4 compared with 47.4 in November. The 12-month moving average of the new orders index also decreased to 56.01 from 72.73 in December 2021.

The full report is available online.