Iowa economic index improves for 12th straight month

A index used by state officials to forecast the state economy improved for the 12th consecutive month in September.

The Iowa Leading Economic Indicators rose in September to 101 from an August level of 100.4. The increase of 0.6 percent was the same as those reported in the preceding months of August and July.

Only two of the eight components used in creating the index were negative in September. They were new residential building permits component and the national yield spread component.

Major contributors to the gain in the overall index included diesel fuel consumption and the agricultural profits index.

Diesel fuel consumption climbed 14.2 percent between September 2009 and September 2010, contributing 0.21 to the overall index value as it boosted the 12-month moving average 1.1 percent.

The agricultural profits index contributed 0.24 to the overall index value as the 12-month moving average of expected profits for corn, soybeans, hog and cattle improved.

September building permits for residential construction fell 22.5 percent from September 2009, and were 42 percent lower than the historical average for September. They contributed -0.10 to the overall index.

The national yield spread is the difference between the yield on the ten-year treasury bond and the three-month treasury note. In December, the spread fell to 2.50, contributing a slight negative of 0.01 to the overall index.

For the six months span through September, the overall index rose 3.7 percent, for an annualized rate of 7.4 percent, according to the Iowa Department of Revenue.