Lardaro: May employment data best R.I. has ‘seen for quite some time’

MAY'S ECONOMIC PERFORMANCE was
MAY'S ECONOMIC PERFORMANCE was "quite good," according to University of Rhode Island economist Leonard Lardaro, who said eight of the 12 indicators improved relative to a year ago. / COURTESY LEONARD LARDARO

SOUTH KINGSTOWN – Leonard Lardaro is optimistic that Rhode Island’s economy is transitioning to a period of more rapid growth.
Lardaro, an economist at the University of Rhode Island who released his Current Conditions Index about the state’s economy on Monday, said that 2015 may not turn out to be as “disappointing” as it looked last month.
The year started fairly slowly, due to atypical bad weather, and while Lardaro said he thought a turnaround would happen in April, it appears to have waited until May instead.
May had employment data that Lardaro described as the “best that Rhode Island has seen for quite some time.” For the first time in two years, he said the drop in the unemployment rate was accompanied by an improving labor force, which rose two-tenths of a percentage point.
The Current Conditions Index rose to 67 in May from 58 in April. In May 2014, it was 58. Indices higher than 50 suggest economic growth, while a value below 50 reflects contraction.
“The CCI has now beaten its year-earlier value for two of the last three months, a rare and very welcome occurrence,” Lardaro wrote.
Out of the 12 economic indicators that comprise the index, eight improved relative to a year ago. In addition to unemployment rate, which fell 2 percent, and the improvement in the labor force, U.S. consumer sentiment grew by double digits at 11.3 percent, its eight consecutive month of increases; retail sales climbed 7 percent; employment services jobs increased 2.2 percent; and private service-producing employment grew 1.7 percent.
Benefit exhaustions, which reflects longer-term unemployment, fell 31.5 percent compared with last year, and new claims, which Lardaro described as a leading labor market indicator, dropped by 11.8 percent.
“We might be witnessing the early stages of improving momentum, as the CCI has now exceeded its year-earlier values for two of the last three months. For Rhode Island, that is a big deal,” Lardaro said.
Areas that struggled in May included single-unit permits, which fell by 15.2 percent year over year, total manufacturing hours, “a measure of sector strength,” which dropped six-tenths of a percentage point; and manufacturing wage, which decreased 4.8 percent, its 15th consecutive drop.
Government employment also had a 0.8 percent drop.
Lardaro also said the benefits of the numerous legislative changes are expected to be felt later this year, which could further boost Rhode Island’s economy.

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