Lardaro: Economic momentum picked up in December

SOUTH KINGSTOWN – Rhode Island’s economic momentum picked up speed in December, improving the economic picture as 2015 begins, said Leonard Lardaro, an economist with the University of Rhode Island, on Monday.
The Current Conditions Index, which measures economic momentum using 12 key indicators, rose to 75, beating a score of 58 not only from December of 2013 but from the two previous months of October and November of 2014, Lardaro reported.
A CCI indicator greater than 50 suggests economic growth, while a value below 50 indicates contraction.
While the fourth quarter of 2014 was “disappointing” as a whole, Lardaro observed, “several of the strong numbers posted in December give reason for hope (that would be a great motto for the state). … Expected positive data revisions, an improving national economy and declining energy prices should at long last begin to manifest themselves in the actual pace and statistical tracking of our state’s recovery.”
Key indicators that showed improvement included total manufacturing hours, which increased by 1.8 percent after three months of decline; single unit permits, which focuses on new home construction, up 14.4 percent after a two-month decline; and U.S. consumer sentiment, which rose 13.5 percent for the fifth time, following three consecutive months of decline.
Another key indicator that is a perquisite to employment growth, employment service jobs, rose by nine-tenths of a percent after two months of decline.
Other indicators that improved included the labor force, up half a percent; the unemployment rate, which dropped to 6.8 percent, now the fifth highest in the country; and private service-producing employment, up by 1.7 percent, compared with November.
Year over year, benefit exhaustions also fell by 22.7 percent, while retail sales increased by 5.5 percent.
Areas that didn’t fare so well included new claims for unemployment, a leading market indicator, which rose by 26.9 percent, ending 10 months of improvement, and government employment, down by half a percent.
“Judging by the December performance of the CCI,” Lardaro noted, “it is premature to conclude that things are getting worse.”

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