Jan 01

Iowa with 62nd straight month of employment gains

reportDES MOINES – A report released by the Iowa Department of Revenue Thursday shows Iowa’s economy remains strong.

The Iowa Leading Indicators Index (ILII) fell to 106.1 (100=1999) in November 2015 from a revised 106.4 in October. The Iowa non-farm employment coincident index recorded a 0.14 percent rise in November, which extends the streak of employment gains to 62 months.

During the six-month span through November, the ILII decreased 2.1 percent (an annualized rate of -4.3 percent). The six-month diffusion index also decreased to 12.5 with seven of the eight components experiencing a decrease of greater than 0.05 percent over the last half a year. Average manufacturing hours registers as the only component to show any positive growth in the past 6 months.

In November, four of eight Iowa Leading Indicators Index components contributed positively. The positive contributors were the Iowa stock market index, the national yield spread, average weekly manufacturing hours and residential building permits. The agricultural futures profits index, the new orders index, average weekly unemployment claims (inverted), and diesel fuel consumption were the four components that contributed to the index negatively

The Iowa Leading Indicators Index (ILII) is designed to forecast the future direction of economic activity in the state of Iowa. The techniques used to build the ILII follow those used by The Conference Board to construct the national Leading Economics Index (LEI) prior to the 2001 revisions. A one-month movement in such an index does not produce a clear signal, rather it is necessary to consider the direction of the index over several consecutive months. A contraction signal in the ILII is considered reliable when two conditions are met: 1. The index declines by at least two percent over a six month period (using an annualized rate); and, 2. A majority of the individual components decline over those six months (the six-month diffusion index less than 50.0).

The Iowa non-farm employment coincident index measures the change in non-seasonally adjusted, total non-farm employment in the state of Iowa. Changes are based on a 12-month moving average of employment and are computed as symmetric percentage changes. The index is a representation of overall economic activity in Iowa.

The employment index and the ILII are constructed to have a value of 100 in the year 1999.

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