When University of Rhode Island economist Leonard Lardaro began working as a forecaster for the New England Economic Partnership in 1991, he realized the Ocean State was not getting the kind of detailed economic analysis happening elsewhere. Seeing an opportunity to fill that gap, Lardaro developed his Current Conditions Index for Rhode Island that 11 years later is relied on to provide a barometer of the state’s economic health.
As the state has struggled to recover from the recession, people have looked to the index to find out how bad it really is here and whether the state has hit a feared double dip. February employment figures placed Rhode Island teetering on the brink of another downturn, but Lardaro held off on calling it a double dip and later learned the labor numbers may have been distorted.
Lardaro discusses why unemployment figures in Rhode Island have gone out of whack and where the state really stands.
PBN: You’ve said this is not only a difficult time for Rhode Island economically but an unusually difficult time to figure out exactly what is happening economically in the state. What is causing the confusion?
LARDARO: Right now the labor-market data that has been released by R.I. Department of Labor and Training has been inaccurate – they even admitted this during the revenue estimating and caseload conference. Right now if you look at the released data, Rhode Island has had declines in payroll employment for about eight of the last nine months and just about every labor-market indicator except for the manufacturing ones are abysmal. … After my March report, I was notified by DLT that when they have incorporated the most recent tax data, Rhode Island hasn’t had that many declines and employment has really been going up.
PBN: Data revisions are normal, but they are also changing, right?