Iowa economic indicators point to job growth through spring

The latest reading on the state's economy from the Iowa Department of Revenue suggests that employment growth will remain positive through spring.

The Iowa Leading Indicators Index held steady at 106.1 in February after rising from 106 in December to 106.1 in January. The six-month annualized change in the index continued to be positive (0.9 percent) for the 13th consecutive month.

The most positive contributor in February was diesel fuel consumption. which increased 5.6 percent from the level in February 2012. February's consumption also was  5.2 percent higher than the historical February average of the prior 10  years, suggesting an increase in the transportation of manufactured products within and through Iowa.

The second-most positive contributor in February was building permits, indicating that the housing market continues its recovery. In February, the 12-month moving average for building permits increased 0.7 percent to 832 from 826 in January, but remained 34.4 percent below the historical average for the month.

The most negative contributor to the Leading Indicators Index was manufacturing hours followed by the agricultural futures profits index and the new orders index.

The average number of manufacturing hours reported for February 2013 was 0.7 hours below the 40.7 hours reported in February 2012. Although 40 hours is still full-time, the lack of overtime reflected in the February average points to some weakening in manufacturing demand.

The agricultural futures profits index was a negative contributor for the 13th consecutive month. The 12-month moving averages of expected profits for livestock fell again in February, while expected profits for soybeans increased and expected profits for corn remained unchanged from January.

The new orders index rose to 70.7 in February from the January value of 66.7. Despite the increase, the index value fell short of the value of 76 from a year ago, suggesting that manufacturing is facing weaker demand.

Unemployment insurance claims decreased in February for the 39th time in 40 months. Claims were 8 percent below the number of claims made in February 2012, but were 5.8 percent above the historical monthly average for the month.

The February Iowa Leading Indicators Index report is available on the Web at

http://www.iowa.gov/tax/taxlaw/econindicators.html.