A monthly gauge of Iowa’s economy showed improvement in December for the third straight month.
The Iowa Leading Indicators Index edged up to 95.8 in December from 95.1 in November, according to the Iowa Department of Revenue. The index is constructed with a value of 100 in 1999.
Looking at a 12-month moving average (except for the yield spread), all eight components of the Iowa Leading Indicators Index contributed positively in December for the first time since April 2007.
The components were average weekly manufacturing hours, the new orders index, the Iowa stock market index, new residential housing building permits, weekly unemployment insurance claims, the yield spread, diesel fuel consumption, and the agricultural futures price index. The yield spread is the difference between the yield on 10-year Treasury bonds and three-month Treasury notes.
Average manufacturing hours rose slightly to 38.9 in December from 38.6 in November and well above the 37.3 average hours reported in December 2008. That’s an indication of increased manufacturing activity and more hours for employees.
The picture was mixed for agricultural commodity profits using a 12-month moving average to adjust for seasonal changes.
Corn profits continued to decline, slipping to 49.2 cents per bushel and cattle losses declined to 7.8 cent per pound in December from 8.6 cents per pound the previous month.
Soybean profits rose to 206.9 cents per bushel in December. Hog producer profits edged up to 6.4 cents per pound in December.
Average weekly unemployment claims fell to 7,725 in December from 7,863 in November. Initial claims for December 2009 were still 57.4 percent above December claims for 1987 through 2007.
Permits for new housing constructed rose to 586 in December. That’s still 47 percent below average December permits between 1998 and 2006.The Iowa Leading Indicators Index is designed to forecast the likely future direction of economic activity in the state. The techniques used to build the index follow those used by The Conference Board to construct the national Leading Economic Indicators Index.