The Iowa Leading Indicators Index increased to 108.5 in May from 107.7 in April, according to the Iowa Department of Revenue. May was the eighth month in a row that the index has not shown contractionary signals, and the 10th month that the index has increased since the COVID-19 pandemic began in Iowa last year.

The Iowa nonfarm employment coincident index recorded a 0.53% increase in May, the second month of positive growth since February 2020. During the six-month span through May, the Iowa Leading Indicators Index increased 4.4% (an annualized rate of 8.8%). The six-month diffusion index remained at 87.5 in May.

Seven of the eight component indicators increased more than 0.05% over the last six months: the agricultural futures profits index, diesel fuel consumption, the Iowa Stock Market Index, the national yield spread, the new orders index, residential building permits and average weekly unemployment claims.

Six of the eight components increased in May: the new orders index, average weekly unemployment claims (inverted), the agricultural futures profits index, diesel fuel consumption, the Iowa Stock Market Index and average manufacturing hours. The national yield spread and residential building permits contributed negatively to the index.

The new orders index recovered up to 72.7 in May, compared with 31.1 in May 2020. The 12-month moving average of the new orders index increased to 73.5 from 70 in April.

The average weekly unemployment claims were 71.4% below May 2020 claims, yet 17.8% above average historical claims for May from 1988 to 2020.

The agricultural futures profits index contributed 0.15 to the Leading Indicators Index. Compared with last year, new crop corn prices were 69.3% higher while soybean prices were 63% higher. The May crush margin for hogs increased 0.6% from April, while the crush margin for cattle increased 7.4%.

Diesel fuel consumption increased 9.7% between May 2020 and May 2021. The 12-month moving average increased to 64.68 million gallons from 64.17 million in April.

Nineteen of the 31 companies on the Iowa Stock Market Index gained value in May, and seven of the 11 financial-sector companies increased. The index increased to 130.76 in May from 125.94 in April.

Average weekly manufacturing hours increased to 40.13 from a revised 40.09 in April. In May 2021, average hours were 40.3, above the 39.9 hours in May 2020, but three-quarters of an hour below the historical monthly average (1996-2020).  

The full Iowa Leading Indicators Index is available online.