New economic indicator forecasts growth for R.I. but not enough to replace jobs
THE RHODE ISLAND Current Economic Indicator for the fourth quarter increased 1.4 percent.
IMAGE SOURCE R.I. CEI
By Kimberley Donoghue PBN Web Editor Twitter: @kydonoghue
SMITHFIELD – A new economic indicator unveiled on Tuesday revealed that Rhode Island’s economy is expected to growth in the next two quarters but at a pace that is well below what is required to replace jobs lost in 2007.
The Current Economic Indicator, released by Bryant University and the Rhode Island Public Expenditure Council, said growth is expected in the next two quarters at a 1.8 percent annualized rate.
In the fourth quarter, Rhode Island’s economy expanded 1.4 percent from the previous quarter.
“The recent expansion of the current economic index can be mostly attributed to external economic forces, rather than internal growth in the local economy,” a briefing on the indicator said, citing the economic recovery in New England and nationally as boosting the CEI. Weekly initial unemployment claims declined, for example, but the number of Rhode Island-based jobs has been flat or declining.
Factors contributing negatively to the CEI included: a decline in construction employment, poor performance by the leisure and hospitality sector, and “the overall depressed level of local aggregate demand” which is influenced by general sales and gross receipt tax revenue in the state.
Wage and salary disbursements had a neutral effect on the CEI which uses nine components to take the pulse of the local economy.
The fourth quarter CEI, 1.44 percent, is a decline from the previous quarter’s 1.84 percent but higher than second quarter’s 0.32 percent and first quarter’s 0.14 percent.
The Rhode Island Current Economic Indicator was unveiled on Tuesday by Edinaldo Tebaldi, assistant professor of economics at Bryant University, during the university’s economic forum on the state’s business climate.