Lardaro: Economic momentum sagged in December

SOUTH KINGSTOWN – A declining 5.1 percent unemployment rate did not keep Rhode Island’s economic momentum from sagging in December, according to University of Rhode Island economist Leonard Lardaro.
Released Monday, December’s Current Conditions Index, a value that reflects 12 broad-based indicators of economic activity, registered only 58 in December, nine points lower than the value of 67 reported a year prior. In November, the CCI was a healthier 75.
CCI measurements higher than 50 suggest economic growth; a value below 50 indicates contraction.
Since December failed to beat its level from a year ago, it ends a streak of nine consecutive months for which Rhode Island had either matched or exceeded its year earlier values.
Lardaro called the latest news “bittersweet,” since positive momentum is evident – just not in the state’s goods-producing sector.
Even though the interest rate dropped, Lardaro writes, current jobless rates are not comparable to similar rates in earlier years because there are fewer people employed overall, so participation rates are much lower. In addition, improvement by more than one economic indicator is necessary to warrant celebration, he said.
And although seven economic indicators recorded favorable economic activity, the state’s goods-producing sector suffered the most, with single-use permits for new residential construction dropping by 11.5 percent, following what Lardaro termed a “bizarre increase of 58.6 percent in November” that he says he still is hard put to understand.
The manufacturing wage declined by 3.3 percent, total manufacturing hours was down 2.9 percent, government unemployment was down 1.3 percent and U.S. Consumer Sentiment slipped by 1 percent.
On the upside, new claims for unemployment declined by 13.3 percent, benefit exhaustions – a measure of long-term unemployment – dropped by 32.7 percent and retail sales and employment services jobs increased by 5.5 percent and 5.1 percent respectively. Also increased are the labor force, by 1.1 percent, and private service-producing employment, which rose 2.4 percent.

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