The Iowa Leading Indicators Index remained unchanged, at 105.2 in January 2024, from a revised 105.2 in December and November 2023.

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 annualized change showed contraction for the 12th month in a row as the Iowa Leading Indicators Index decreased 1.2%, an annualized rate of -2.4%. The six-month diffusion index remained in a contractionary signal for the 13th month in a row following a decrease in the six-month diffusion index to 25.0 in January 2024 from a revised 37.5 in December 2023.

The monthly diffusion index increased to 62.5 in January from 50.0 in December. 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 saw a 0.07% increase in January.

Five of the eight components increased month over month in January: diesel fuel consumption, residential building permits, the new orders index, the Iowa Stock Market Index and the national yield spread. Average manufacturing hours contributed no change to the index as the component experienced no change from December. Average weekly unemployment claims and the agricultural futures profit index detracted from the Iowa Leading Indicators Index.

Diesel fuel consumption increased 5.4% between January 2023 and January 2024. The 12-month moving average increased to 64.83 million gallons in January from 64.59 million in December.

In January, residential building permits were 572, up from 355 last year. The 12-month moving average increased to 916 in January from 898 in December. January permits were 61.1% above January 2023, and 22.7% above the monthly historical average.

The new orders index in January increased to 49.6 from 45.7 in December. The 12-month moving average of the new orders index has increased to 50.2 from 49.9 in December 2023.

During January, 11 of the 28 Iowa-based or Iowa-concentrated publicly traded companies on the Iowa Stock Market Index gained value, and six of the 10 financial-sector companies increased. Although nearly two-thirds of the stocks experienced losses, the stock market index increased to 121.8 in January from 120.7 in December.

The yield spread remained in inversion territory (below 0) in January at -1.39%, from -1.42% in December. January is the 15th month in a row that the yield spread has been in inversion. The long-term rate increased four basis points while the short-term rate increased by one basis point.

The 12-month moving average of average weekly manufacturing hours remained unchanged at 39.58 in January from a revised 39.58 in December. In January, average hours were 39.1, over an hour and a half below the historical monthly average.

The agricultural futures profit index showed expected profits decreases in both crop commodities and cattle commodities during January. Compared with last year, new crop corn prices were 18.4% lower, while soybean prices were 12.5% lower. The January crush margin for cattle decreased 15.3% from December, while the crush margin for hogs increased 12.3%. The crush margin involves the market value of the animal minus its initial cost and the cost of feeding it.

The 12-month moving average of weekly unemployment claims increased in January from 2,195 to 2,339. Unemployment claims were 77.9% above January 2023 claims, yet 8.6% below average historical claims for January.

The full report is available online.