Lardaro: R.I. economy makes progress, but still ‘precarious’
RHODE ISLAND'S Current Conditions Index improved month over month in May, rising to 67 from 58 in April, but failed to improve year over year for a 10th consecutive month, said University of Rhode Island economist Leonard Lardaro.
SOUTH KINGSTOWN – Modest gains in economic momentum in May hold promise for Rhode Island this summer, University of Rhode Island economist Leonard Lardaro said in his latest Current Conditions Index, but as usual that is only part of the story for the Ocean State.
At a measurement of 67, May’s economic momentum finally picked up to match January’s index after three successive months stuck at 58, Lardaro reported.
However, that good news did not outweigh the fact that 67 remained below the 75 CCI recorded in May a year ago. As a result, Rhode Island’s economic performance has failed to improve year over year for 10 consecutive months, Lardaro said.
The index measures the state’s economic performance, or momentum, using a dozen different metrics. A CCI greater than 50 indicates progress, while a value less than 50 signals setbacks.
The sign to look for in June and beyond will be a break in that streak, showing “true improvement” in the CCI year over year, Lardaro said. Such improvement could be an indicator of a recovery not only as it relates to the state but also in the context of the nation’s evolving economic rebound, he added.
“I continue to describe the overall economic performance of Rhode Island’s economy as precarious,” Lardaro concluded.
Three leading indicators in the index improved in May. Single-use permits, which reflect new housing construction activity, rose 9 percent compared with a year ago. Total manufacturing hours rose 3 percent, even though the manufacturing wage declined 2.3 percent. New claims for unemployment insurance dropped slightly, by three-tenths of a percent, compared with May 2013.
The unemployment rate also dropped from 9.5 percent last May to 8.2 percent this year, but in context, that lower rate remains the highest rate in the country, he said.
Other indicators that improved in May were: retail sales, rising 4.9 percent; benefits exhaustions, which reflect longer term unemployment and declined 13.1 percent; private service-producing employment, rising 1.4 percent; and labor force, which ticked up slightly by two-hundredths of a percent.