Lardaro calls R.I. labor force performance ‘a train wreck’

RHODE ISLAND'S labor force has continued to decline since its high of 574,700 in December 2006, University of Rhode Island economist Leonard Lardaro said. / COURTESY LEONARD LARDARO
RHODE ISLAND'S labor force has continued to decline since its high of 574,700 in December 2006, University of Rhode Island economist Leonard Lardaro said. / COURTESY LEONARD LARDARO

SOUTH KINGSTOWN – Calling the state’s labor force performance “a train wreck,” University of Rhode Island economist Leonard Lardaro said it has failed to increase each year since it peaked in December 2006.
“We find ourselves confronted with a continually declining labor force, a factor that continues to limit our potential growth,” Lardaro wrote in his Current Conditions Index report released Monday.
The labor force was among three out of 12 economic indicators Lardaro analyzes in his CCI that failed to improve over the year in January.
The DLT said the labor force was 550,900 in January, 1,300 fewer than a year earlier, a 0.2 percent decline. He said the last time the labor force had a year-over-year increase was in April 2014.
And, due to revisions to the 2016 labor market data by the state Department of Labor and Training, Rhode Island did not perform as well as originally thought last year in the CCI, which measures the state economy.
As a result, the CCI only beat its earlier value twice, not four times, as was reported. It also did not hit a value of 83 in December, but instead a value of 75, which remained higher than December 2015’s value of 50.
A CCI reading greater than 50 suggests economic growth and a value less than 50 indicates contraction.
Lardaro said January’s CCI was 75, matching its highest level for all of 2016. It also was higher than January 2016’s reading of 50. He added that nine of the 12 indicators also improved in January, another positive.
One of the indicators experiencing positive growth was government employment, which rose 0.5 percent over the year, and has remained above 60,000 for more than a year now. He said rising federal government employment has helped sustain this employment level. U.S. consumer sentiment also improved over the year by nearly 7 percent, its third consecutive increase, and single-unit permits jumped 37.1 percent, in spite of strong growth also reported in January 2016. Retail sales grew 3.7 percent, and private service-producing employment grew 1 percent, which is close to its highest rate of growth since July 2016.
Total manufacturing hours rose 2 percent – this indicator is a proxy for manufacturing output, and the manufacturing wage increased 4.6 percent. New claims, which Lardaro referred to as the “most timely measure of layoffs,” fell 9.4 percent, another positive.
The unemployment rate fell seven-tenths of a percentage point to 4.7 percent, marking its first time below the national jobless rate in a more than a decade, a positive development, but something Lardaro blamed largely on the “shrinking labor force.” January’s payroll employment increase also contributed to the jobless rate decline, he said.
However, on the negative side, benefit exhaustions rose 16.7 percent; this was the second time in the last four months it failed to improve. And employment services jobs, which includes temporary employment and is an indicator of future employment, declined 5.2 percent.
“It was my biggest disappointment among all of the revised indicators. Not only did this indicator fail to improve in January (-5.2 percent), it hasn’t risen since last March,” Lardaro said about employment services jobs. “Continuing deterioration in this indicator is indicative of weakening future employment growth.”
Lardaro ended his report on a dismal note.
“As of January, the tenth anniversary of our prior payroll employment peak has come and gone. We remain below that level,” Lardaro said.

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  1. AS TO THE OPENING PARAGRAPH:

    SOUTH KINGSTOWN – Calling the state’s labor force performance “a train wreck,” University of Rhode Island economist Leonard Lardaro said it has failed to increase each year since it peaked in December 2006.

    I think that if the Good Professor, who has, many times, spewed forth erroneous and slanted information over the years would include “The Overall Public Sector” in his calculations, etc….he would find that that segment of the s=State’s labor Force has increased substantially and that they are, in fact, “The Train Wreck” that is being referenced.

    One only need to look at the many State Department/Agencies that are so screwed-up that even if The Good Lord Himself/Herself were to descend down from heaven to try and straighten out the He?She would throw His/her arms up in frustration and go back home!