Construction of a new home. (The Gazette)

For the third consecutive month housing starts rose in September in Iowa, boosting the state’s Leading Indicators Index compiled by the Iowa Department of Revenue.

The 12-month moving average for building permits increased to 753 in September from 721 in August, the highest level since May 2008. Housing has been rebounding since the recession, which curtailed construction of new homes due to lack of buyer demand.

The Iowa Leading Indicators Index recorded a positive change of 0.3 percent, rising to 105.9 in September from 105.6 in August. The index’s recent moves suggest that Iowa employment growth will remain positive through the holiday season.

The second most positive contributor in September was the Iowa stock market index. Of the 34 stocks included in the index, 27 had positive gains in September, including 10 of the 11 financial-sector companies.

Five stocks had double-digit growth in September and, on average, stock values grew by 4.9 percent.

The agricultural futures profits index was the only negative contributor in September, primarily due to the impact of the drought on grain prices and livestock producers. Although cattle and hog prices remain at near record highs, profits are being squeezed as the higher grain prices are raising feed costs.

The average new crop corn price in September was down from both July and August, but is nearly $2 over the June price and is 7.3 percent higher than last September. The futures price of soybeans increased from August and was 25 percent above last September’s price.

Hay prices have soared from $75 per ton in the spring to as high as $310 per ton at Midwest hay auctions. Straw also is fetching higher-than-normal prices as livestock farmers look to supplement grain as a feedstock.

Unemployment insurance claims fell for the 35th consecutive month. Claims were 8.1 percent below the number of claims made in September 2011, but still 7.3 percent above the historical average for September claims.

The average number of weekly claims in September was 2,314, which is the lowest weekly average since September 2007.

The 12-month moving average of manufacturing hours rose to 40.9 in September. While September’s average manufacturing hours at 40.6 contributed to the overall index, it also indicated reduced overtime needs.

The national yield spread on bank certificates of deposit also was a positive contributor in September for the second consecutive month and only the fourth time in the last year. The long-term interest rate rose to 1.72 percent in September and the short-term rate rose to 0.11 percent, which widened the yield spread.