Negative unemployment claims data slows Jan. LEI growth
RHODE ISLAND'S Leading Economic Indicator Index -- produced jointly by Providence Business News and e-forecasting.com -- rose 0.6 percent in January, a less significant improvement than the 1.1 percent increase recorded in December.
PROVIDENCE – An index of Rhode Island’s leading economic indicators produced by Providence Business News and e-forecasting.com rose six-tenths of a percent in January to 126.3 from 125.5 in December.
The slight increase in January – the lowest rate of growth in the index since August 2013 – followed a larger increase of 1.1 percent in December, signifying a slowdown of expected economic growth in the state.
The economic indicator index uses nine statistics to forecast the direction of the state’s economy over the next three to six months. Positive numbers signal growth while negative numbers denote contraction.
A reading of 100 on the Providence Business News/e-forecasting.com Leading Economic Indicator Index is equivalent to the state’s activity in 2000. In January 2013, the leading indicator index was 119.
Five of the nine components made a positive contribution to Rhode Island’s economy in January, including: weekly hours in manufacturing, regional consumer expectations, national stock prices, the interest rate spread and the state employment barometer.
January marked the fifth consecutive month that the state employment barometer registered a positive contribution on the Leading Economic Indicator Index, but represented a weaker contribution than in December, when the employment barometer was stronger.
Four of the components made a negative contribution to the index in January, including unemployment claims, building permits, manufacturing exports and the national orders index. January was the first time since March 2013 that unemployment claims made a negative contribution toward the index.
In January, Rhode Island’s six-month growth rate – “a signal of turning points” – was 8.4 percent, up from a rate of 8.2 percent in December.
By comparison, the long-term annual growth rate for the index was 1.8 percent, the same as the annual growth rate of the state’s overall economic activity.