Lardaro: Economy stronger in June

RHODE ISLAND'S current conditions index measured 75 in June, its highest yet this year. Nine of the 12 key economic indicators showed year-over-year improvement in June, according to University of Rhode Island economist Leonard Lardaro. / COURTESY LEONARD LARDARO
RHODE ISLAND'S current conditions index measured 75 in June, its highest yet this year. Nine of the 12 key economic indicators showed year-over-year improvement in June, according to University of Rhode Island economist Leonard Lardaro. / COURTESY LEONARD LARDARO

SOUTH KINGSTOWN – Leonard Lardaro said Rhode Island’s economy showed more strength in June, and appears to be transitioning to a more rapid rate of economic growth.
The University of Rhode Island economist writes about the state’s economy. His monthly “Current Conditions Index” measured 75 for June, its highest rate this year. He said the CCI has now matched or exceeded its year-earlier value for the most recent four months. June 2014’s CCI was 50. Indices higher than 50 suggest economic growth, while a value below 50 reflects contraction.
“As was true for May, virtually all the key labor market numbers in June moved in the direction we want them to move and for the right reasons,” Lardaro wrote.
He said this is especially true for the unemployment rate and the labor force.
“While we have still only recovered about 70 percent of the jobs lost during the last recession, the pace at which these lost jobs are being recovered now appears to be accelerating,” he said.
Of the 12 key economic indicators, nine improved overall compared with last year.
In addition to the dip in the jobless rate by 1.8 percent and labor force growth of 0.6 percent, U.S. consumer sentiment improved 16.6 percent (a double-digit increase for the ninth consecutive month), and single-use permits for new home construction rose 16.5 percent, the first time this category has improved since the winter ended and also representing its highest value since February 2013, Lardaro said.
Other increases: Retail sales, 6.1 percent; employment services jobs, 5.5 percent; and private service-producing employment, 2 percent. Benefit exhaustions, reflecting longer-term unemployment, fell nearly 23 percent, while new claims, which Lardaro described as a “leading labor market indicator that reflects layoffs,” fell 16.7 percent. The manufacturing wage dropped 5.3 percent (the 16th consecutive time) and total manufacturing hours also declined 1.8 percent, its third consecutive decline. Government employment also fell 1.3 percent.
“What we are witnessing now are the combined forces of our state’s economy continuing to heal and the benefits we are deriving from national and neighboring state momentum. The good news is that the recently enacted legislation should prolong this once its effects begin to be felt later this year,” Lardaro wrote.

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