SOUTH KINGSTOWN – “As bad as the data [is], I do not believe that Rhode Island has fallen into a recession at the present time,” said University of Rhode Island economist Leonard Lardaro in presenting his Current Conditions Index.
“However, I have now upgraded my assessment of the likelihood that Rhode Island falls into a recession this fiscal year from 50 to 60 percent.”
The CCI index registered a neutral value of 50 in September; the index tracks the state’s economic performance through a dozen national and local economic indicators. A reading of less than 50 indicates economic contraction, while greater than 50 signifies expansion.
September improved on the August reading of 42, but fell from a revised July figure of 58.
Lardaro said September was the seventh consecutive month which failed to meet or exceed its year-earlier value.
“It is safe to conclude that Rhode Island is no longer near stall speed, the conclusion I reached in last month’s report: we are now pretty much ‘dead in the water’.”
Six of the 12 indicators improved: retail sales, private service-production employment; total manufacturing hours; manufacturing wage; benefits exhaustions; and the unemployment rate.
Nevertheless, Lardaro warned that two of indicators’ movement should be viewed with skepticism. The manufacturing wage surged 16.3 percent in September; if the trend continues, he said, it would close the gap with the national average, despite having lagged behind for nearly a decade. The unemployment rate also dropped despite payroll and resident employment declines.
The indicators that did not improve were: government employment; U.S. consumer sentiment; single-unit permits; employment services jobs; labor force; and new claims.
“Rhode Island remains saddled with a long list of structural negatives that will only mitigate any future momentum that emerges. Rhode Island’s margin for economic error has now effectively disappeared,” he said.
