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economy

Lardaro: R.I. ‘dead in the water’

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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.

University of Rhode Island, URI, economist, Leonard Lardaro, Current Conditions Index, CCI, Rhode Island, CCI, indicators,

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