By Kimberley Donoghue PBN Web Editor Twitter: @kdonog
SOUTH KINGSTOWN – University of Rhode Island economist Leonard Lardaro said that although year-over-year comparisons show a “bland” picture for the local economy in October, a “somewhat more optimistic picture” emerges on a monthly basis in his Current Conditions Index.
The index registered a neutral value of 50 in October, marking the eighth consecutive month for which the CCI failed to beat its year-earlier value. 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.
The CCI was 50 in October and September, down from 67 in the same months a year earlier, but up from the August value of 42.
Six of the twelve indicators improved year-over-year in October, including: retail sales, employment services jobs, private service-producing employment, manufacturing wage, benefit exhaustions, and the unemployment rate.
When looking at the previous month, however, seven indicators were either flat or improved.
Lardaro said the “critical” indicator to watch is retail sales, which increased by 4.7 percent in October from a year earlier – its fourth improvement in the last five months, in spite of the continuing deterioration of U.S. consumer sentiment, which fell by 9.9 percent.
“We must abide by the most basic rule of data analysis: never make too much of a single month’s data. Data revisions, especially for labor, could alter this emerging optimism, as October through December employment values are historically those most likely to be changed through rebenchmarking,” he noted.