SOUTH KINGSTOWN – Rhode Island’s troubled labor market continued to impede momentum that in March had otherwise improved across several economic sectors, according to the Current Conditions Index report released Monday by University of Rhode Island economist Leonard Lardaro.
March’s CCI came in at 58, matching the index for the colder month of February and bringing to eight the number of consecutive months the index has failed to improve, Lardaro said.
The index, released Monday, measures the state’s economic performance, or momentum, using a dozen different metrics. A CCI greater than 50 signals progress, while a value less than 50 indicates setbacks.
“Winter weather is no longer a possible explanation,” Lardaro wrote, since improved weather conditions contributed to improvement in single-unit permits for home construction, up 20 percent compared with February; new claims for unemployment, down 7 percent compared with last March; and manufacturing hours, up 2.3 percent.
March’s CCI of 58 is significantly below the CCI of 83 measured a year ago, and below the index of 67 for January as well.
While Rhode Island’s troubling downward trend may be partially offset by the impact of the accelerating national economic growth rate, Lardaro added, that may not be enough to counter an index he said is “stuck” in negative territory.
Among the labor statistics dragging down the state’s overall momentum, the unemployment rate remained the highest rate in the nation in March despite falling to 8.7 percent, Lardaro said. Benefit exhaustions rose 3.5 percent for the first time in over a year; government employment fell by 0.5 percent; and although the labor force fell less than 1 percent, March represented the 11th consecutive month the indicator dropped.
Another telling indicator included employment service jobs, a prerequisite to employment growth, which fell 1.3 percent in March, registering a decline for the fourth month in a row.
Retail sales rose 4.8 percent compared with a year ago, and private service-producing employment increased 1.6 percent compared with this time last year.
“The present recovery continues to be less broadly based than it was a year ago,” Lardaro wrote. “It appears that our state’s cyclical negatives are gaining strength, which will dissipate our overall momentum.”
