12-Month Backward Moving Average of Iowa Avg Weekly Manufacturing Hours

This chart presents the 12-month backward moving average of weekly average of hours worked by employees in the manufacturing sector in Iowa. If the economy is just beginning to grow out of a recession, businesses will tend to hold off on hiring new workers until they are more confident that economic growth is improving, and will instead ask their existing workers to work more hours. As the economy continues to improve, eventually businesses will be forced to add more workers, and this increase in employment will reinforce the positive trend in economic growth. In contrast, if the economy is just beginning to slow down, employers wishing to maintain employee loyalty will try to keep their workers by reducing hours worked, rather than immediately laying-off workers. If the slowdown deepens into a recession, then eventually businesses are forced to lay off workers, which reinforces the negative trend in economic growth. Avg Weekly Manufacturing hours is a component of the Iowa Leading Indicators Index which is designed to forecast the future direction of economic activity in the state of Iowa.