Lardaro: August arrived ‘with a bang’

ELEVEN OF THE 12 indicators on the Current Conditions Index improved in August, giving it its highest value - 92- since December 2012. / COURTESY LEONARD LARDARO
ELEVEN OF THE 12 indicators on the Current Conditions Index improved in August, giving it its highest value - 92- since December 2012. / COURTESY LEONARD LARDARO

SOUTH KINGSTOWN – August “arrived with a bang for Rhode Island,” according to University of Rhode Island economist Leonard Lardaro.
His monthly Current Conditions Index, which measures economic momentum, surged to 92, its highest value since December 2012, as 11 of its 12 indicators improved. A year ago, it was 67. In July, it was 75.
CCI measurements higher than 50 suggest economic growth, while a value below 50 indicates contraction.

Lardaro is optimistic for the third quarter, given August’s results, which he said was the sixth month for which the CCI has matched or exceeded its year-earlier value.
“Clearly, Rhode Island’s rate of growth is continuing to accelerate above last year’s tepid 1.2 percent rate,” Lardaro wrote in his report.
Despite August’s strong showing, Lardaro said Rhode Island still has recovered less than three-fourths of the jobs it lost during the last recession. He noted that the labor force size employment rates are rising, but remain “well below” the levels they attained during the last recovery.
“As I noted last month, better late to ‘the party,’ than never,” Lardaro said.
The only indicator that did not improve in August was the manufacturing wage, which declined 4.2 percent, marking its 18th consecutive drop. That prevented the CCI from reaching a score of 100 – its highest possible value, Lardaro said.
Single-unit permits for new home construction and total manufacturing hours reversed previous downward trends by posting year-over-year increases – 21 percent and 0.9 percent, respectively.
Lardaro called single-use permits the “most volatile” of the CCI indicators. He said manufacturing hours measures manufacturing sector strength, and its latest increase ends a run of four consecutive decreases.
For the 11th month in a row, U.S. consumer sentiment rose 11 percent. Employment service jobs climbed 5.1 percent, and new claims, a labor market indicator that reflects layoffs, dropped by 10.7 percent.
Retail sales, which increased 3.5 percent, continued its growth trend, albeit at a slower pace than in previous months, Lardaro said. Private service-producing employment grew 1.9 percent; government employment rose 0.3 percent; benefit exhaustions, reflecting longer-term unemployment, fell 8.7 percent; and the labor force increased 1.2 percent. He noted that the jobless rate also fell to 5.6 percent.
“For only the fourth time in a while, our jobless decline was accompanied by large jumps in resident and payroll employment, and a substantial decline in the number of unemployed,” Lardaro wrote.

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1 COMMENT

  1. Good News – Bad News:

    “The only indicator that did not improve in August was the manufacturing wage, which declined 4.2 percent, marking its 18th consecutive drop.”

    “18th consecutive drop.” Very obvious that our manufacturing segment is struggling. This one reason I’m on a tear to focus on our current strength industries to help float our economic boat while we potentially regain our footing in modern manufacturing.

    My colleagues are proposing a plan that not only capitalizes our current strength industries, it showcases our state’s indigenous products and services.

    Learn more at: www.1of52.net/blog
    fb – Rhode Island First Initiative – Discover RI First?
    #RIFIRST
    #DISCOVERRIFIRST