economic indicators

It’s still a tepid recovery, says Lardaro

JUNE'S CURRENT CONDITIONS INDEX, even with the worst-case scenario employment numbers, showed the Rhode Island economy continues to improve, albeit at a modest rate.
Posted 8/13/12

SOUTH KINGSTOWN – Flawed labor market data continues to confuse assessment of the state’s economic recovery, University of Rhode Island economist Leonard Lardaro reports in his latest Current Conditions Index.

While some unadjusted numbers previously pegged the state in a double-dip recession, a recent analysis from the state Department of Labor and Training showed that employment here actually had been increasing.

“Apparently, this came as a big surprise to much of this state’s media, even though the errors … were publicly acknowledged by the DLT months ago, and I have been discussing all of this regularly,” Lardaro said in his report.

Lardaro reports in the June CCI that Rhode Island continues in a “tepid” recovery that has been going for 28 months.

The CCI tracks Rhode Island’s economic performance over a dozen metrics. A number greater than 50 indicates progress. A value of less than 50 signals setbacks.

“While economic reality here is far better than what the ‘official’ data show, the non-flawed data indicate this recovery displayed some loss of momentum … that will likely continue going forward,” Lardaro said.

The June index registered at 67, up from 58 in May. It was 58 in June 2011.

Those numbers are based on official DLT data, but Lardaro has said fluctuations in some reported numbers could put June’s CCI at 75, up from a likely May index of 67.

Lardaro first addressed the flawed data, adjusting his CCI to include two measurement numbers, several months ago.

Eight CCI indicators showed month-over-month improvement in June including a 14.4 percent decrease in new unemployment claims, a 14.6 percent increase in single-unit permits and a 14 percent increase in manufacturing wage.

However, the labor force decreased by 1.5 percent, employment service jobs decreased by 3.5 percent, and private, serving-producing employment fell by 1.2 percent.

Lardaro’s numbers also indicate that June’s unemployment rate reached 10.8 percent, a small increase from the 10.7 percent rate he reported for May.

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