Iowa Leading Indicators Index unchanged in November

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With only two positive contributors, the Iowa Leading Indicators Index was stuck at 160 in November, according to the Iowa Department of Revenue.

The six-month annualized change in the index continued to be positive — 1.8 percent — for the 10th consecutive month, and the six-month diffusion index fell to 62.5. The Iowa Department of Revenue said the recent moves by the Leading Indicators Index suggest that Iowa employment growth will remain positive into the new year.

A strong gain logged by residential building permits in November along with a slight positive change in unemployment insurance claims offset all the weaknesses in the other six components.

For the fifth consecutive month, the most positive contributor was the number of residential building permits issued. In November, the 12-month moving average for building permits increased to 826, from 795 in October, the highest level since April 2008.

There were 945 permits issued in November, an increase of more than 63 percent from last November’s 579 building permits.

The only other positive contributor was unemployment insurance claims, which fell in November after the solitary increase in 35 months occurred in October. Claims were 8.3 percent below the number of claims made in November 2011, but remained 6.9 percent above the historical average for November claims.

The largest negative contributor in November was the Iowa stock market index. Of the 34 stocks included in the index, only 11 had positive gains in the month of November, and only one of the 11 financial-sector companies experienced a gain.

Diesel fuel consumption was the second-most-negative contributor, decreasing 2.3 percent from where it was last November. The 61.1 million taxable gallons of diesel fuel sold in November was 1.4 million gallons less than taxable sales in November 2011.

The 12-month moving average of manufacturing hours remained at 40.8 in November, due to rounding. But the number of hours reported for that month dropped to 41.1 compared with 41.7 hours in November 2011.

The new orders index fell to 53.5 from the October value of 57.1, which was also below the value of 55.5 from a year ago. Although still in expansion territory above 50.0, the new orders index has been falling since June, suggesting weakness in the manufacturing sector.

The agricultural futures profits index remained negative in November, the 11th negative contribution in the last year. The 12-month moving averages of expected profits for livestock fell again, while expected profits for corn and soybeans increased.

The impact of the national drought on grain prices continued to be felt in November.

The average new crop corn price in November was down from October, but 18 percent above the price seen in November 2011. The futures price of soybeans also decreased from October but was 28.4 percent above last November’s price.

Although cattle and hog prices remain at near record highs, profits are being squeezed as higher grain prices push up feed costs.

The U.S. Department of Agriculture on Wednesday released its annual preliminary listing of prices paid to Iowa farmers and those across the nation in December, compared with those recorded in December 2011.

Iowa farmers received an average $7 per bushel for corn last month, an increase of $1.22 per bushel from December 2011. Soybean prices increased $3.30 per bushel to $14.60 per bushel compared with December 2011, and oat prices decreased 33 cents per bushel to $3.90 per bushel.

All hay prices increased $71 to $197 per ton compared with December 2011. Alfalfa hay prices increased $78 to $220 per ton and other hay prices increased $52 to $145 per ton.

This year's drought either eliminated hay cuttings or severely reduced quality, driving up feed costs for livestock farmers in Iowa, Illinois, Wisconsin and other Midwestern states.  

Milk prices paid to Iowa dairy farmers rose from $20.40 per hundredweight in December 2011 to $22.90 per hundredweight in December 2012.

The full Iowa Department of Revenue Iowa Leading Indicators Index November 2012 report is available at

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