Lardaro: R.I. recovery remains uneven going into 2014
WHILE NINE OF THE DOZEN METRICS that comprise the Current Conditions Index improved in January, its author, URI researcher Leonard Lardaro, is not convinced that the state's economy is moving forward on a consistent basis.
SOUTH KINGSTOWN – The new year brought mixed economic results in Rhode Island, as discouraging unemployment data offset positive revisions of January payroll estimates, according to the Current Conditions Index produced by University of Rhode Island economist Leonard Lardaro.
The index, released Monday, measures the state’s economic performance, or momentum, using one dozen different metrics. A CCI greater than 50 indicates progress, while a value less than 50 signals setbacks.
In January, Rhode Island advanced somewhat, registering a CCI of 75, a value 17 points higher than December’s revised CCI of 58. On a year-over-year basis, however, the January CCI remained unchanged from the 75 recorded in January 2013, Lardaro reported.
January marked the sixth month in a row – and the seventh time in eight months – during which the monthly CCI failed to exceed the previous year’s value, signaling that the current economic recovery in Rhode Island is less broadly based than it was a year ago, Lardaro said.
When taken in consideration with the ninth consecutive monthly decline in the state’s labor force and an unemployment rate of 9.2 percent, the January CCI figure indicated that Rhode Island’s economy remains mired in a “good news, bad news” situation “where behind every silver lining lurks a gray cloud,” Lardaro said.
“There is some cause for celebration in the re-benchmarked payroll data,” Lardaro wrote in the report, “but the household survey data continues to paint a very discouraging picture as far as how this recovery is progressing.”
Despite the malaise described in Lardaro’s report, three of the CCI’s five leading indicators improved in January: U.S. consumer sentiment rose 10.1 percent, its second increase following three months of declines, while single-unit permits rose 5.5 percent. Total manufacturing hours registered only minor improvement, gaining two-tenths of a percent after severe weather in the first month of the year slowed production.
Both leading indicators that failed to improve in January were related to Rhode Island employment, with employment service jobs declining 2.4 percent and new claims for unemployment insurance climbing 1.3 percent. January marked the first increase in unemployment claims since August.
“The downtrend in this indicator since July 2013 may be ending,” Lardaro wrote. “It will be necessary to observe its behavior over the next several months before any confirmation is possible, however.”