A monthly index of leading indicators tracked by the Iowa Department of Revenue continues to see declines in the state’s economic activity, but declines in June were considerably less than what was experienced in March and April as the COVID-19 pandemic swiftly changed Iowa’s economy. 

The Iowa Leading Indicators Index decreased 0.3% in June to a reading of 100.5, the seventh consecutive month of decreases, from 100.8 in May. The monthly diffusion index remained unchanged at 18.8 in June as only two of eight components of the indicator contributed positively.

The six-month annualized change in the index fell to -11.9% in June from -11.7% in May, the 20th consecutive month of a negative value and the fourth month below a -2% change. The six-month diffusion index decreased to 25 in June from 37.5 in May. 

The Iowa Leading Indicators 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 percent and a six-month diffusion index below 50.0. 

Two of the eight components added to the index in June: the Iowa stock market index increased to 77.51, from 70.28 in May, and the national yield spread expanded to 0.57%, from 0.53% in May. 

Average weekly unemployment claims, one of the eight indicator components, steadily declined. The 8,742 average weekly unemployment claims for the month of June was 78.6 percent lower than May’s 40,835 average weekly unemployment claims. 

“The decline in the unemployment rate by 2 percentage points in June is welcome news after several months of historically high rates of unemployment,” Iowa Workforce Development director Beth Townsend said in a prepared statement. “Moving out of double-digital unemployment is a tremendously positive good sign for our economic recovery as businesses reopen and Iowans return to work.”