SOUTH KINGSTOWN – The first quarter of 2013 ended on a “positive” note following a weakening start to the year, according to University of Rhode Island economist Leonard Lardaro’s Current Conditions Index, released Monday.
“Hopefully [this] signals that Rhode Island’s slowing pace of economic activity was only short-lived, although we probably won’t know for sure until late summer,” Lardaro said in prepared remarks. “At any rate, this was a fairly good way to begin the third year of this recovery.”
Lardaro’s CCI puts a figure to the state’s economic performance over a dozen metrics, measuring momentum, not values.
A CCI indicator greater than 50 indicates progress, while a value less than 50 signals setbacks. The CCI for March was 83, up from 67 in February and up from 58 in March 2012.
Lardaro in the CCI for March pointed that both January and February saw CCI declines over the previous months.
“In spite of the monthly fluctuations we witnessed in the first quarter, the CCI did average 75 over that period, a respectable value,” he said. “And while the CCI values for each of the first three months this year might be viewed as somewhat discouraging relative to what we saw in the second half of 2012, all three did manage to exceed their year-earlier values.”
Lardaro said March’s CCI was helped by the retail sales indicator which reversed the loss it experienced in February, showing a 2.4 percent improved value.
Other positive indicators were a 21.8 percent rise in single-unit permits, a 2.9 percent rise in U.S. consumer sentiment, a 26.6 percent decrease in benefit exhaustions, a 4.6 percent increase in employment service jobs, a 2.5 percent increase in total manufacturing hours, a 4.5 percent increase in the manufacturing wage, and a 1.5 percent decrease in the unemployment rate.
Smaller gains were seen in a 0.7 percent increase in private, service-producing employment, and a 0.1 percent improvement value in the labor force.
Negative indicators, however, included a 8.2 percent rise in new unemployment claims.
“New claims, which reflects layoffs, has begun to rise on a year-over-year basis, an unwelcome development,” Lardaro said. “It has also been trending higher on a month basis since the third quarter of last year, which could signal is further lack of improvement in future months.”
There also was a 1 percent loss in government employment.
Lardaro also pointed to caution that Rhode Island’s unemployment rate falling to 9.1 percent in March was “not as significant an indicator of Rhode Island’s momentum as many here seem to believe.”
“Not only is the unemployment rate a lagging economic indicator, its monthly declines from 9.9 percent to 9.1 percent have been accompanied by corresponding decreases in our state’s labor force, reflecting the fact that some of our state’s jobless residents have dropped out of the labor force and no longer counted among the unemployed,” he said.