Iowa leading indicators point to job growth

The Iowa Leading Indicators Index increased from 107.7 to 108 in March, according to the Iowa Department of Revenue, signaling continued growth for the state's economy.

The monthly diffusion index jumped to 75, with six of the eight components experiencing positive changes for March, up from only three in February. The six-month annualized change in the index increased to 2.8 percent from 2 percent in February, and was positive for an 11th consecutive month.

Employment growth continued in March for the 42nd consecutive month with the relatively strong 0.11 percent monthly expansion. The Iowa Leading Indicators Index's recent moves suggest that Iowa employment growth will continue through the summer.

The top two positive contributors in March were the agricultural futures profits index and the Iowa stock market index. With the Porcine Epidemic Diarrhea virus killing a growing number of piglets across the country, April contract prices hit record levels, pushing up futures contract hog prices by 49.5 percent for the month over last year.

At the same time, Iowa State University reported that production costs for hogs have fallen for the eighth month in a row, down 11.6 percent from March 2013. The two factors caused expected profits for lean hogs for the month to increase to a record high 61.45 cents per pound, pushing up the 12-month moving average to 28.2 cents per pound.

Cattle futures prices increased 13.3 percent while production costs continued to fall year-over-year, down 4.3 percent compared with last March.

While projected livestock profits jumped, expected grain profits continued to weaken with corn futures prices falling 29.7 percent and soybean futures prices down 3.2 percent below last March.

Creighton University Professor Ernie Goss, who produces the new orders index, reported that durable and non-durable manufacturers are adding jobs in Iowa, and he expects manufacturers and non-manufacturers to expand jobs and output at a higher rate in the second quarter of 2014.

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