Lardaro: Economic momentum picks up in March

SOUTH KINGSTOWN – Economic momentum picked up in March in Rhode Island in spite of “weather-related distortions,” positioning the state for better future performance, according to Leonard Lardaro, an economist with the University of Rhode Island.
Lardaro’s Current Conditions Index, released Monday, registered a 67 in March, higher than both January’s and February’s measurement of 58 and last March’s number, also 58.
The index measures economic momentum using 12 key indicators. Indices higher than 50 suggest economic growth, while a value below 50 reflects contraction.
The “atypically harsh winter” appears to have had the biggest influence on a statistically weak index, Lardaro said.
As he did for February, Lardaro provided two measurements Monday – 67, when the impact of winter weather on single-unit building permits are factored in – but 75 if that is accounted for as a distortion. In February the measure of 58 similarly improved to 67 once storm-related effects were accounted for.
Single-unit permits, always a potentially volatile indicator, dropped by 19 percent year over year in March and hit lows of only 17 recorded permits in February and 61 in March, which reflect annualized values of 431 and 721 units respectively.
Also lower, by 2.9 percent, was the manufacturing wage, but total manufacturing hours rose slightly, by four-tenths of a percent, the report shows.
Despite these strains on the economy, seven other indicators showed improvement, Lardaro said. These included Consumer Sentiment, a 16 percent increase; retail sales, a 4.2 percent increase; employment service jobs, +1.1 percent and private service-producing employment, +1.3 percent.
Likewise, benefit exhaustions, which reflect longer-term unemployment, declined 33.6 percent and new claims for unemployment decreased 16.4 percent. The unemployment rate fell to 6.3 percent in March.
The labor force, however, also dipped six-tenths of a percentage point. Government employment dropped three-tenths of a percentage point.

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