The Iowa Leading Indicators Index (ILII) decreased 0.4% in October to 105.6 from a revised 106.0 in September.

During the six-month span through October, the ILII decreased 1.3%, an annualized rate of -2.6%. The six-month diffusion index increased to 25.0 in October from 18.8 in September.

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 contractionary signals for the 10th month in a row and the six-month annualized change showed contraction for the 12th month in a row.

The monthly diffusion index decreased to 25.0 in October from 37.5 in September. 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 0.01% increase in October. This measure is computed using a complex computation based on the Conference Board’s Leading Indicators Index.

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

During October, the yield spread increased but remained in inversion territory (below 0) at -0.80% from -1.18% in September. October is the 12th month in a row that the yield spread has been in inversion. The long-term rate increased 42 basis points, while the short-term rate increased by 4 basis points.

The 12-month moving average of average manufacturing hours increased to 39.44 in October from a revised 39.40 in September. In October, average hours were 40.1, above the 39.6 hours in October 2022, yet just under an hour and a half below the historical monthly average.

In October, the 12-month moving average of average weekly unemployment claims increased from 2,055 to 2,100. Unemployment claims were 37.42% above October 2022 claims, yet 36.34% below average historical claims for October.

The new orders index in October decreased to 46.6 compared to 47.5 in September. The 12-month moving average of the new orders index has decreased to 49.4 from 50.3 in September 2023.

Residential building permits dropped to 912 in October 2023 from 1,209 last year. The 12-month moving average decreased to 892 in October from 917 in September. October permits were 24.6% below October 2022, and 27.7% below the monthly historical average.

Four of the 28 Iowa-based or Iowa-concentrated publicly traded companies on the Iowa Stock Market Index gained value during October, and one of the 10 financial-sector companies increased. With over two-thirds of the stocks experiencing losses, the stock market index decreased to 111.51 in October from 118.79 in September.

Diesel fuel consumption decreased 7.8% between October 2022 and October 2023. The 12-month moving average decreased to 65.45 million gallons in October from 65.92 million in September.

During October, the agricultural futures profits index showed expected profit decreases in both crop commodities and hogs. Cattle saw expected profit increases. Compared to last year, new crop corn prices were 28.8% lower while soybean prices were 7.0% lower. The October crush margin for hogs decreased 9.0% from September while the crush margin for cattle increased 8.0%.

The full report is available online.