SOUTH KINGSTOWN – An “inauspicious start” to the fourth quarter is at least not as bad as it could be, as reflected in economic momentum in Rhode Island that slowed in October, according to University of Rhode Island economist Leonard Lardaro.
According to the October Current Conditions Index, Rhode Island registered a “67” for the month, down from 83 in September but the same as last October. He said it was the lowest level since May.
“While we slowed a bit in October, at least we had something to slow from,” Lardaro noted in his one-page report. “It’s been a while since we’ve been able to say that!”
CCI measurements higher than 50 suggest economic growth; a value below 50 indicates contraction.
Eight of 12 CCI indicators improved, but weakness was concentrated in the good-producing sector, particularly in manufacturing and construction activity. Single-unit permits for new home construction fell by 15.3 percent compared with last October. Total manufacturing hours fell by 1.2 percent, and the manufacturing wage fell 2.8 percent – the 10th consecutive drop, Lardaro said.
Government employment also dropped by eight-tenths of a percent, according to the report.
Rhode Island appears to be “almost immediately” affected by broader national slowdowns, a condition that will persist until the state becomes more competitive economically, Lardaro observed.
That national slowdown, “which had been adversely affecting Rhode Island’s month-to-month performance, appears to have begun hurting our year-over-year momentum,” he stated.
Improving in October were new claims for unemployment, which declined by 16.4 percent; employment service jobs increased by 1.2 percent; private service-producing employment increased by 1.7 percent and the labor force rose by 1.1 percent.
Also improving were U.S. consumer sentiment, which increased by 3.5 percent; retail sales, which rose by 1 percent; and benefit exhaustions, which declined 23.9 percent.
The unemployment rate also fell to 5.3 percent in October, 1.8 percentage points compared with a year ago.
“My concern moving forward,” Lardaro noted, “is that both our employment and labor force participation rates have been declining since July. Worse yet, both rates remain well below recession levels.”
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