Where is the Rhode Island Economy Going?

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Monday, April 11, 2011

Where is Rhode Island's economy going? According to URI Professor and top economist, there are some positive signs, but critical improvement is needed.

The February Current Conditions Index value, 67, means that eight of the 12 indicators improved compared to their values one year ago. Particularly noteworthy this month was the fact that several indicators improved in spite of very strong “comps” last year.

The leading CCI indicators continues to be Employment Service Jobs. Not only has that indicator improved for the last 15 consecutive months, it did so this month (+1.3%) on top of a 7.4 percent gain one year ago. 

According to Lardaro:

The other improving indicators generally reflected very positive momentum. US Consumer Sentiment rose by 5.4 percent, quite an improvement from January. Private Service-Producing Employment increased by 1.0 percent, its eleventh consecutive improvement. Manufacturing turned in its most impressive performance in quite a while.

Total Manufacturing Hours rose by 5.2 percent, its ninth improvement in the last ten months, as both the workweek and employment rose. Along with this was a very strong increase in the Manufacturing Wage (+3.8%). So, Rhode Island’s manufacturing continues to mirror the national trend.

Our Unemployment Rate fell again, from 11.8 percent one year ago to 11.2 percent this month. Unfortunately, it remains stuck well above ten percent. Finally, New Claims, a leading labor market indicator, fell by 6.5 percent in February. It is still
unclear whether its trend will become one of declining values each month.

Ultimately, its trend will be a critical determinant of future improvements in the Current Condition Index. The last improving indicator, Benefit Exhaustions, which reflects long-term unemployment, declined by 7.8 percent in February. Retail Sales fell in by 2.4 percent in February, while Government Employment declined by 1.6 percent. Single- Unit Permits, as stated earlier, fell 46.2%. Finally, RI's Labor Force was unchanged in February, which for calculation purposes, means it also failed to improve.

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