SOUTH KINGSTOWN – Despite some signs of strength, the Ocean State economy turned in an overall “disappointing” performance in April, according to University of Rhode Island economist Leonard Lardaro, who released his Current Conditions Index on Monday.
Lardaro’s CCI, which uses a dozen data points to measure momentum in the state economy, came in at 67 for April, down from the 83 recorded in March, although it matches the April 2012 level.
April marked the first time in 2013 the monthly reading failed to beat the year-ago number.
“The April value of 67 was a bit disappointing, but Rhode Island is hanging in there, albeit at a pace that has failed to accelerate since the second half of 2012,” Lardaro said in prepared remarks.
A CCI indicator greater than 50 indicates economic growth, while a value below 50 suggests contraction. The state’s economy showed particularly strong signs of growth late in 2012, posting CCI readings of 92 in August and October and 83 for November and December.
For April, eight of the 12 indicators followed by the CCI improved, with overall labor force, consumer sentiment, new jobless claims and government employment slowing or remaining steady.
“New claims for unemployment insurance, which reflects layoffs, has begun to rise on a year-over-year basis, a very unwelcome development,” Lardaro said.
However, Lardaro said some of the improving measures are leading indicators. Employment service jobs — temporary labor, which historically increases before full-time hiring — rose 10.6 percent, a level Lardaro called “stunning.” Single-unit building permits rose 26.1 percent.
“The continued uptrend in single-unit permits, a leading indicator, reflects our having moved past a bottom in new home construction,” Lardaro wrote in the report.
The state’s manufacturing sector also showed signs of strength in April. Total manufacturing hours rose 1.7 percent, while manufacturing wages increased 4.2 percent.
A drop in the state’s unemployment rate, to 8.8 percent, is “not as significant an indicator of Rhode Island’s momentum as many here seem to believe,” Lardaro said, noting that people leaving the workforce due to discouragement or retirement shrunk the overall labor force.
“Much of our state’s economic momentum throughout the remainder of this year will be dictated by events at the national and global level,” Lardaro said. “I continue to expect weak momentum through the second quarter, which should eventually improve during the second half of this year.”
Lardaro also said that recently released U.S. Bureau of Economic Analysis statistics confirm the CCI’s assessment of the local economy during 2011 — when it was basically flat — and 2012, when it grew by 1.4 percent, the highest rate of expansion since 2006.
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