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Iowa Leading Indicators Index shows a continuing recovery


The Iowa Leading Indicators Index increased to 109.4 in August 2021 from 109.1 in July. August was the 11th month in a row that the index has increased. The monthly diffusion index improved, rising to 68.8 in August from 50 in July.

The Iowa nonfarm employment coincident index recorded a 0.22% increase in August, making it the fifth month of growth since February 2020. The six-month diffusion index decreased for the first time in five months to 81.3 in August from 87.5 in July.

Similar to July, the index suggests Iowa’s economy is continuing its economic recovery from COVID-19 but gains remain smaller compared with those made in March and April 2021.

Five of the eight components increased in August: the agricultural futures profit index, average weekly unemployment claims (inverted), the Iowa Stock Market Index, average manufacturing hours and the new orders index. The three components that detracted the index were residential building permits, diesel fuel consumption and the national yield spread.

The 12-month moving average remained unchanged at 39.9 from a revised 39.9 in July. Average hours in August were 40.1, up slightly from August 2020 and over one hour under the historical monthly average.

The 12-month moving average of claims decreased from 4,886 in July to 4,554 in August. Unemployment claims are 70.1% lower than August 2020 claims and 35.1% below average historical claims for August.

In August, the new orders index’s 12-month moving average increased to 76.4 from 76.0 in July. Over the last year, the index recovered sharply up to 77.2 compared with 72.5 last August.

The agricultural futures profit index was mixed in August, with both grain commodities and cattle expecting profits while profit loss is expected on hogs. New crop corn prices were 63.7% higher than in 2020, and soybean prices were 47.2% higher. The August crush margin for hogs decreased 1.6% from July while the crush margin for cattle increased 3%.

During August, the yield spread contracted to 1.23% from 1.27% in July. August is the eighth month in a row since August 2018 that the yield spread has been at or above 1%.

August 2021 saw 20 of the 30 companies on the Iowa Stock Market Index gain value, including nine of the 10 financial sector companies. The gains resulted in an increase in the stock market index 133.06 in August from a revised 126.37 in July.

The 12-month moving average of taxable diesel gallons sold decreased to 65.62 million gallons in August from 65.68 million in July. From August 2020 to August 2021, diesel fuel consumption decreased 1.1%.

The full report is available online

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