Iowa Leading Indicators Index Dips in September
The state's economic gauge slipped 0.2% to 108.9 even as nonfarm employment edged higher.
Updated on Nov. 12, 2026 in Economic Indicators
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The Iowa Leading Indicators Index decreased 0.2% to 108.9 in September, down from 109.1 in August. The monthly diffusion index fell to 56.3 from 62.5, while the Iowa nonfarm employment coincident index rose 0.2%.
Why it matters
The September gain in the employment coincident index was the first increase since January 2025, a sign of mixed signals in Iowa's economy. Readers tracking the state's near-term direction now have a leading gauge that has softened even as current employment strengthened.
The Iowa Leading Indicators Index fell 0.2% to 108.9 in September, while the six-month change stood at 0.8%, or 1.6% annualized. The release does not specify which of the eight components drove the monthly decline or whether it will continue.
The details
The index combines the Iowa stock market index, manufacturing hours, new orders, unemployment claims, agricultural futures profits, yield spread, residential building permits and diesel fuel consumption. Residential building permits rose to a 12-month moving average of 1,092, and September permits were 19.6% above September 2025, while weekly initial unemployment claims eased to 2,049.
Timeline
January 2025: last month before the Iowa nonfarm employment coincident index last rose.
August 2026: the Iowa Leading Indicators Index stood at 109.1 with a diffusion index of 62.5.
September 2026: the leading indicators index decreased to 108.9.
Macro View
The index's turning-point rule flags a downturn only when the six-month annualized change falls below -2.0% and the diffusion index drops under 50.0. September's six-month reading of 1.6% annualized and diffusion index of 87.5 remain well clear of both thresholds, placing the state's trajectory on a stable footing despite the monthly slip.
For Iowa households, the index's slight softening is a signal to watch rather than a change in day-to-day costs, since the release reports no direct effect on prices or wages. The rise in residential permits, up 19.6% from a year earlier, may point to steadier home-building activity in the months ahead.
The takeaway
A single monthly dip in a leading index rarely settles the direction of a state economy, so tracking the six-month trend and diffusion measures gives a clearer read on where Iowa is heading.
Further reading
For the broader context behind these readings, explore Economic Indicators coverage for Iowa.
Source note: This article includes information reported by Business Record.
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