The Iowa Department of Revenue has published its latest Leading Indicators Index, which was down 0.1% in October.

The monthly diffusion index decreased to 31.3 in October from 62.5 in September. The federal government shutdown affected the release of employment and housing data used in the index so the October index is based upon available components. 

When the September and October data become available, retroactive revisions will be included in the historical data and nonfarm employment index. During the six-month span through October 2025, the index increased 0.7%, or an annualized rate of 1.4%. The six-month diffusion index remained unchanged at 100 in October from September. 

The 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. For the second month in a row, all eight component indicators increased more than 0.05% during the past half-year. However, data for two components, the average weekly manufacturing hours and residential building permits, have yet to be released and could yet affect the diffusion index.

Only two of the eight components increased month-over-month in October: average weekly unemployment claims and the national yield spread. The agricultural future profits index, or AFPI, new orders index, diesel fuel consumption and the Iowa Stock Market Index were detractors from the index. 

Average weekly jobless claims was the strongest positive contributor to the index in October. Changes are calculated based on a 12-month moving average and are inverted when added to the index. The 12-month moving average of claims declined from 2,483 to 2,447.

Unemployment claims were 20.2% below October 2024 claims, and 44.8% below average historical claims for October.

For October, the Iowa Stock Market Index and the new orders index went from positive contributors to detractors from the index. The average weekly manufacturing hours and residential building permits again contributed 0.0 to the index as the Bureau of Labor Statistics and the U.S. Census Bureau have not yet released employment or housing data due to the federal government shutdown.

The AFPI was the strongest detractor to the index in October. Expected profits increased in corn and soybean and hog commodities, however cattle and hog commodities experienced an expected profit decrease. Compared to last year, new crop corn prices were 1.5% higher and soybean prices were also 3.2% higher. The October crush margin for cattle decreased 105.9% from September while the crush margin for hogs decreased 5.0% from September.