Lardaro: Economic recovery continued in November

THE LATEST CURRENT CONDITIONS Index for November showed that total manufacturing hours fell for the third consecutive month, but this time at a greater rate, -2.7 percent, according to URI economist Leonard Lardaro. / COURTESY LEONARD LARDARO
THE LATEST CURRENT CONDITIONS Index for November showed that total manufacturing hours fell for the third consecutive month, but this time at a greater rate, -2.7 percent, according to URI economist Leonard Lardaro. / COURTESY LEONARD LARDARO

SOUTH KINGSTOWN – Rhode Island’s economic recovery is continuing, though less broadly than hoped for, according to the November Current Conditions Index, University of Rhode Island economist Leonard Lardaro said on Monday.

The index, which measures the state’s economic performance, or momentum, using 12 different metrics, measured 67 for the month, a drop from 83 in November 2013, according to the report. A CCI indicator greater than 50 suggests economic growth, while a value below 50 indicates contraction.

“The question of the fourth quarter is whether the pace of Rhode Island’s recovery will keep pace with the accelerating national economy,” Lardaro said.

“While it remains uncertain whether the pace of our recovery will eventually accelerate, it is at least safe to say that Rhode Island’s recovery is continuing, albeit less broadly based than we would like. The improving national economy and declining energy prices can only benefit our state’s recovery, hopefully causing its pace to move more in line with the national economy,” he added.

- Advertisement -

October’s index measured 58, following three consecutive months of a measurement of 75. Lardaro says the October drop could have been skewed by a “mystery decline” in payroll employment for the month that he thinks was an aberration. If that was the case, he said, then the October CCI could be viewed as 67, the same as November.

Though good, he said, a reading of 67 “is inconsistent with the acceleration hypothesis” of the third-quarter results.

In November, two of the five leading indicators in the index failed to improve. One was total manufacturing hours, which measures strength in the sector, which fell for a third consecutive month, by 2.7 percent. The manufacturing wage also declined, for the ninth consecutive time, by what Lardaro called a “difficult to believe” 4 percent.

Another key decliner was single-unit permits, a volatile indicator that reflects new-home construction, which fell 23.8 percent.

“The momentum provided by Rhode Island’s goods-producing sector has clearly moderated,” he said.

Improved performance on the index include new claims, a leading labor-market indicator, which fell 8.4 percent. That marked the measurement’s eighth improvement in the last nine months, “perhaps the brightest spot [in November’s] performance.

Other gainers include employment service jobs, 1 percent; U.S. consumer sentiment, 18.5 percent; retail sales, 6.6 percent increase from a year ago and private-service-producing employment, which rose 1.4 percent.

No posts to display