Iowa Economic Outlook: Navigating Uncertainties in September 2025
The Iowa Leading Indicators Index (ILII) offers a crucial glimpse into the state’s economic health, signaling potential turning points. While recent data presents a generally positive picture, some underlying factors warrant careful consideration. This report provides a detailed analysis of the September 2025 ILII, offering insights for businesses and individuals alike.
Understanding the Warning signs
The ILII is designed to flag potential economic contractions. Specifically, a six-month annualized change in the index below -2% and a six-month diffusion index below 50.0 are considered key warning signals. Currently, the index hasn’t hit these thresholds, but ongoing monitoring is essential.
Recent Performance: A Mixed Bag
September’s data reveals a complex economic landscape. Here’s a breakdown of the key findings:
* Broad-Based Enhancement: For the frist time since April 2010, all eight component indicators of the ILII increased by more than 0.05% over the last six months. This is a notable positive growth.
* Data Delays: however, data for two crucial components – average weekly manufacturing hours and residential building permits – remain unavailable due to the recent federal government shutdown. This absence could impact the overall diffusion index once released.
* Diffusion Index Decline: The monthly diffusion index decreased to 62.5 in September, down from 81.3 in August. This suggests a slowing of the breadth of economic expansion.
Key Indicator Analysis
Let’s delve into the performance of individual indicators:
* New Orders: This was the strongest positive contributor, increasing to 50.5 in September (from 50.3 in August). The 12-month moving average also rose, reaching 49.4.This indicates growing demand for Iowa-produced goods.
* Agricultural Futures: The agricultural sector presented a mixed picture. While profits increased for corn, soybeans, and hogs, cattle and hog margins decreased. New crop prices for corn and soybeans were 2.9% higher year-over-year.
* Employment: The labor market remains robust. The 12-month moving average of weekly unemployment claims declined to 2,483. Claims are considerably below both September 2024 levels (34.8%) and ancient averages (44.8%).
* Iowa Stock Market: Despite more stocks losing value (9 of 27 Iowa-based companies), the index rose to 168.25 from 166.10 in August. This was largely driven by strong gains from Lumen Technologies (CenturyLink).
* Diesel Fuel Consumption: A slight decrease in diesel fuel consumption (0.6% year-over-year) and a declining 12-month moving average (65.78 million gallons) suggest a potential slowdown in transportation and related economic activity.
Impact of the Government Shutdown
The federal government shutdown significantly impacted data collection. The absence of manufacturing hours and building permit data creates uncertainty.You should be aware that the diffusion index could be revised downward once this information becomes available.
what This Means for You
the Iowa economy is currently showing resilience, but headwinds exist.
* Businesses: while the overall outlook is positive, monitor key indicators closely. Be prepared for potential adjustments based on the delayed data releases.
* Individuals: The strong labor market provides some security. However, be mindful of potential economic shifts and plan accordingly.
Looking Ahead
Continued monitoring of the ILII and its component indicators is crucial. the delayed data releases will be particularly important to watch. We will provide updates as they become available, helping you stay informed and navigate the evolving economic landscape.
Disclaimer: This analysis is based on available data as of October 26, 2025, and is subject to revision. Economic conditions can change rapidly, and this report should not be considered financial advice.
