R.I. economic growth picks up, but labor force still a concern
THE STATE'S ECONOMIC activity grew at an annual rate of 2.2 percent during the third quarter of 2013 and is expected to grow at an annualized rate of 2.4 percent during the fourth quarter, according to the Rhode Island Current Economic Indicator Index released by the Rhode Island Public Expenditure Council and Bryant University.
COURTESY BRYANT UNIVERSITY AND THE R.I. PUBLIC EXPENTITURE COUNCIL
PROVIDENCE – The Rhode Island Current Economic Indicator Index, released by the Rhode Island Public Expenditure Council and Bryant University’s Center for Global and Regional Economic Studies on Friday, reported that Rhode Island’s economic growth gained momentum in the third quarter and will carry that momentum through the year’s end.
The CEI for the third quarter rose to 2.2 percent from a revised 1.6 percent for the second quarter. The leading indicator, projecting the CEI growth rate for the fourth quarter, is forecast at 2.4 percent.
This is the first time since the index’s creation in 2010 that both the CEI and the leading indicator are greater than 2 percent.
The quarterly CEI combines several “key gauges of economic activity” in a single statistic to measure the overall current economic conditions in Rhode Island. It is calibrated to grow at the rate of the real gross state product and can be interpreted as the underlying growth rate of the state economy, according to RIPEC and the Bryant center.
This quarter’s boost was attributed to total wage and salary disbursements, as well as large employment gains in construction and trade, transportation and utilities. The report cited a 5,500 year-over-year increase in Rhode Island-based jobs in October, but also noted the state’s labor market is still under significant stress.
A 7.9 percent rise in initial unemployment claims and a 1.2 percent decline in leisure and hospitality services employment negatively affected the third-quarter CEI.
The shrinking of the Rhode Island labor force – which fell by 13,100 people to 552,700 in October compared with the same period last year – remains a serious concern, as does Rhode Island’s unemployment rate of 9.2 percent, the highest in New England and the second-highest in the United States.
Rhode Island’s economic growth, while improving, also continues to lag growth in New England and the country as a whole, as the state felt the effects of 2008 recession more intensely than elsewhere in the region and the United States.
“The state economy has been unable to grow fast enough to close the economic gap created during the recession,” the report stated. “The CEI and leading indicator suggest that Rhode Island’s economy continues to grow slower than the national economy.”