In R.I., 2013 ends as ‘mixed blessing,’ economist says
AFTER STARTING the year off strong in 2013, economic momentum in Rhode Island slowed, suggesting the recovery is not broadly based, according to University of Rhode Island economist Leonard Lardaro, who produces the monthly Current Conditions Index measuring the state's economic performance.
Another year past, another mixed reading of economic progress for Rhode Island.
That’s the assessment of Leonard Lardaro, the University of Rhode Island economist who produces the monthly Current Conditions Index measuring the state’s economic performance, or momentum, using a dozen different metrics.
In December, Rhode Island advanced somewhat, registering a CCI of 75, a value 8 points higher than November’s reading of 67. On a year-over-year basis, however, the December CCI fell 8 points short of the 83 recorded in December 2012, Lardaro reported.
A CCI greater than 50 indicates progress, while a value less than 50 signals setbacks.
December marked the fifth month in a row – and the sixth time in seven months – during which the monthly CCI failed to exceed the previous year’s value. That result is tempered by the fact that the end of 2012 was unusually strong, Lardaro said.
When taken in consideration with a slight increase in the unemployment rate to 9.1 percent, the highest rate in the country, Rhode Island’s progress remains uneven, Lardaro said.
“It’s a mixed blessing; the whole year was mixed,” said Lardaro in a phone interview. “We did extremely well at the end of 2012 and into the early part of 2013, but it was like we stepped on the gas pedal and then pulled back. We’re still moving forward, we’re still in a recovery, but that recovery has become less broadly based as we moved toward the end of 2013. As a result, our rate of growth slowed.”
Despite the negative results, the December CCI indicators revealed some positive signs of growth compared with a year ago, the economist said. Four of the five leading indicators improved: U.S. consumer sentiment rose 12.9 percent, employment service jobs rose 2 percent and total manufacturing hours rose 3.5 percent. Most significantly, new claims for unemployment insurance declined nearly 22 percent.
“While this indicator is not yet in a well-defined downward trend,” Lardaro wrote in the report, “the most recent four months indicate this may be changing.”
In addition, another leading indicator, single-unit permits, fell slightly, by 1.4 percent, the third time in 2013 that it failed to improve. December weather is likely to be more of a factor in that result than any actual weakness in the housing sector, Lardaro said.
Looking ahead, the state may be better able this year to meet or exceed CCI indexes that ranged between 67 and 83 in the first half of 2013, Lardaro said, which would indicate a broad recovery and accelerated momentum.