SOUTH KINGSTOWN – Rhode Island’s economic recovery continues to lose its momentum, most significantly in the manufacturing and retail sectors, according to University of Rhode Island economist Leonard Lardaro’s July Current Conditions Index.
“What a bizarre situation Rhode Island is in,” Lardaro said. “The acceleration in activity that everyone here had been so eagerly awaiting has already occurred and is in the process of disappearing.”
Lardaro said the state’s “tepid” recovery remains going, now for 29 months, but that its growth slowed by mid-year.
“The most critical question going forward is whether monetary policy will be able to re-accelerate the United States and world economies,” Lardaro said. “Even if they do, how much will Rhode Island benefit given its non-competitive tax and cost structure? This would be a very appropriate time for our state’s leaders to begin to lead at long last.”
The CCI tracks Rhode Island’s economic performance over a dozen metrics. A number greater than 50 indicates progress while a value less than 50 signals setbacks.
Lardaro has been using two measurement numbers for several months to address conflicting data from the R.I. Department of Labor and Training that he says is flawed and paints a darker picture for the state than really exists.
For July, Lardaro issued a CCI of 58, down from 75 in June. An adjusted CCI that takes into account the DLT data was issued at 50, down from 67 in June.
Lardaro points to his reported changes in manufacturing wages and manufacturing hours, both reporting gains, at 11.8 percent and 0.1 percent respectively. Both of those numbers are down from recent months.
Manufacturing wages grew 14 percent from May to June. Manufacturing hours rose 3.6 percent from May to June.
Growth was also seen in metrics including single-use permits, by 14.2 percent. New unemployment claims declined by 2.2 percent.
However, retail sales fell by 1.6 percent, government employment by 1.5 percent, and employment service jobs by 5 percent. Benefit exhaustions, which measures long-term unemployment, rose by 11 percent.
The CCI indicates the labor force fell by 1.5 percent and that the state’s unemployment rate remained at 10.8 percent from June.