KINGSTON – “Rhode Island’s economic implosion … continued unabated in February,” University of Rhode Island economist Leonard Lardaro wrote today in his monthly report on the state’s economy.

His Current Conditions Index stood at 8 points for the month, same as in January, and tied for the all-time low first recorded in April 1991, amid a nationwide recession, defense cutbacks and the Rhode Island banking crisis.

The CCI has a neutral value of 50 points; higher scores indicate the state’s economy is growing, while lower scores indicate it is contracting. The index – based on 12 economic indicators related to housing, retail sales, the employment situation and the labor supply – attained its maximum value of 100 points several times in 1984 and 1986.

“In terms of economic performance, 2008 has been a historic year for Rhode Island,” Lardaro wrote.

The state “started the year with its economy far worse than flat – a substantially worsening economic picture. For January, the Current Conditions Index was 8, tied for its lowest value ever. Only one indicator improved, the manufacturing wage, which ironically reflected skill shortages in the midst of all the economic weakness.

“In February, Rhode Island set a new record: For the first time in its history, the Current Conditions Index registered values of 8 for two consecutive months. Once again … the only improving indicator was the manufacturing wage,” which rose 2.8 percent.

The index had hit 50 points in February 2007, before starting a slide that has continued since August.

“What the CCI indicators show all too vividly is a labor market that is becoming unhinged and weakness spread throughout Rhode Island’s entire economy,” Lardaro said today. “I hate to be that negative, but that is the accurate assessment at present.”

Half the CCI’s 12 indicators worsened by double-digit percentages in February, he said. Compared with a year ago, the University of Michigan / Reuters index of Consumer Sentiment fell 22.4 percent. Employment-service jobs, “a leading labor market indicator,” fell 11.7 percent. New claims for unemployment benefits, a measure of layoffs, rose 11.7 percent. Benefit exhaustions, a measure of long-term unemployment, rose 24 percent. The state’s unemployment rate surged to 5.8 percent from 4.7 percent a year ago, an increase of 18.4 percent – and would have risen more, Lardaro noted, if not for the 1.2 percent of workers who dropped out of the labor force. And, in a worsening Lardaro described as “a positive note,” single-unit permits for housing construction fell 10.7 percent. “While this might sound disastrous, this [decline in future] new construction helps us reduce our inventory of unsold homes,” he said.

Also declining were total manufacturing hours (-6.9 percent); retail sales (-1.3 percent); private service-producing employment (-0.5 percent); and government employment (-0.3 percent).

“We are – as I noted last month – in a second recession phase, where prior economic activity levels become ever-more unattainable. What is the only thing that could possibly be worse? Having to eliminate a large budget deficit amid all this weakness. …

“All is not lost, however. Keep in mind that the CCI reflects the underlying momentum of our state’s economy, not its overall level of activity. So, while the levels of almost all indicators are falling, many remain at ‘reasonable’ levels,” Lardaro said.

The Current Conditions Index, created by University of Rhode Island economist Leonard Lardaro, measures the strength of the state’s economic climate. Additional information, including historic data, is available at members.cox.net/lardaro/current.