By Kimberley Donoghue PBN Web Editor Twitter: @kydonoghue
SOUTH KINGSTOWN – The second quarter hasn’t been “all that kind to Rhode Island,” said a University of Rhode Island economist, while warning that the state’s economic recovery may be plateauing.
According to the Current Conditions Index, authored by Leonard Lardaro, Rhode Island had a value of 58 for the third consecutive month in May.
The index tracks the state’s economic performance through a dozen national and local economic indicators. A reading below 50 indicates economic contraction, while above it signifies expansion.
Seven of the twelve indicators improved relative to their values a year ago: U.S. consumer sentiment; retail sales; private service-production employment; total manufacturing hours; manufacturing wage; new claims; and the unemployment rate.
“The trends in several indicators appear to have changed in way that will make it more difficult for our rate of growth to increase from its current level,” said Lardaro, pointing to the labor force, which has declined or failed to improve for four consecutive months, and the number of employment service jobs, falling for three months.
The momentum provided by total manufacturing hours may also be fading, he said.
Nevertheless, it is important to note that Rhode Island is in its 16th month of recovery, Lardaro said, in spite of the trends seen in May.
“Unfortunately, Rhode Island is also plagued by a host of structural negatives that sap a great deal of its cyclical momentum. What is at issue here should be how rapidly our state’s recovery proceeds from here, not when or whether this recovery might end,” Lardaro concluded.
The indicators that did not improve in May were: government employment; single-unit permits, which reflect new home construction; employment services jobs; labor force; and benefit exhaustions.