CCI: Slow growth marks beginning of fourth quarter
LEONARD LARDARO, the University of Rhode Island economist who calculates Rhode Island's monthly Current Conditions Index, said the state is likely to see slowed economic growth through the end of the year. October's CCI was 75, up from 67 in September but lower than last year's October figure of 92.
SOUTH KINGSTOWN – Rhode Island’s economy sustained positive, if sluggish, momentum in October, according to the Current Conditions Index produced by University of Rhode Island economist Leonard Lardaro.
Released Monday, the index registered 75, up from 67 in September, but far short of last October’s index of 92. Nine of 12 measures improved.
Lardaro’s index measures the state’s economic performance, or momentum, over a dozen metrics, or indicators. Lardaro seasonally adjusts each indicator, and then compares its monthly value with that of the same month a year ago to determine whether or not it has improved. A CCI index greater than 50 indicates progress while a value less than 50 signals setbacks.
Four of five leading indicators performed well, the October report stated, including an increase of 2.4 percent in total manufacturing hours, which measures strength in the manufacturing sector.
“This indicator has improved for 10 of the last 12 months,” Lardaro wrote, “something I never thought I would see again, especially as one of the foundations of our recovery’s momentum.”
Other leading indicators that fared well included a soaring 61.3 percent increase in single-unit permits in the housing sector, a drop of 8.9 percent in new claims for unemployment, and a healthy increase of 4.2 percent in employment service jobs.
That said, the October index failed to exceed its year-earlier value for the third consecutive month, Lardaro said. This pattern is likely to recur through the fourth quarter, he said.
Retail sales and the unemployment rate were flat in October, while the most significant drop was in U.S. consumer sentiment, which fell 11 percent.
Lardaro repeated his mantra that while momentum is building gradually over time, it will take an even longer time with these fits and starts to regain the economic level the state achieved at its peak prior to the recession.