R.I. shows expansion in March, but just ‘barely,’ says Lardaro

WHILE THE CURRENT CONDITIONS INDEX indicated growth for Rhode Island's economy in March, author Leonard Lardaro characterized it as "ugly." / COURTESY LEONARD LARDARO
WHILE THE CURRENT CONDITIONS INDEX indicated growth for Rhode Island's economy in March, author Leonard Lardaro characterized it as "ugly." / COURTESY LEONARD LARDARO

SOUTH KINGSTOWN – The state experienced a “very disappointing” first quarter as Rhode Island’s economy was “expanding, but barely,” said University of Rhode Island economist Leonard Lardaro.

Lardaro’s Current Conditions Index, released Monday, was 58, a seven-point decline from February’s 67, the same rating the CCI scored for February 2015. March’s figure also represented a decline from the 67 recorded in March 2015. CCI measurements higher than 50 suggest economic growth; a value below 50 indicates contraction.

“Make no mistake about it, this month’s CCI value of 58 was an ugly 58 based on the behavior of a number of key indicators. Worse yet, the CCI once again failed to exceed its year-earlier value, a feat we have yet to accomplish this year,” said Lardaro.

Each month’s measurement reflects 12 broad-base indicators of economic activity including consumer sentiment, unemployment, retail sales and government employment.

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He noted one major positive movement in March’s CCI was the 44.1 percent growth of single-unit permits, which was preceded by a rise of 185.7 percent in February.

Other sectors that experienced positive movement were:

  • Private service-producing employment at 2 percent
  • Total manufacturing hours and manufacturing wage, which both increased 0.4 percent
  • The unemployment rate declined 0.9 percent
  • And benefit exhaustions fell 26.5 percent

Negatives noted by Lardaro were:

  • A 0.5 percent decline in the labor force, the 22nd year-over-year fall for the state
  • A 2.9 percent decrease in retail sales, which Lardaro said was usually “the CCI’s star performer”
  • A 1.9 percent fall in U.S. consumer sentiment, the fourth consecutive decline for that category
  • A 1.1 percent dip for employment service jobs, its first decline in more than a year
  • A 10.1 percent fall for new unemployment benefits claims, a leading labor market indicator of layoffs
  • A 0.7 percent dip for government employment

Lardaro said the “biggest surprise” in the March CCI was the 0.4 percent jump in manufacturing wage, the first increase for that category in a “long time.”

He called the growth rates for all factors, with the exception of single-unit permits and private sector-producing employment, “mediocre, to say the least.”

He added: “Unfortunately, we have allowed ourselves to remain far from where we would have been had we reinvented our state’s economy in ways that would better insulate us from weakening national economic growth.”

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