R.I.’s economic momentum for July provides ‘glimmer of hope’

UNIVERSITY OF RHODE ISLAND professor Leonard Lardaro reported that Rhode Island's Current Conditions Index for July improved over the same month last year, breaking a trend of economic stagnation in the state. / COURTESY LEONARD LARDARO
UNIVERSITY OF RHODE ISLAND professor Leonard Lardaro reported that Rhode Island's Current Conditions Index for July improved over the same month last year, breaking a trend of economic stagnation in the state. / COURTESY LEONARD LARDARO

SOUTH KINGSTOWN – Registering a positive value of 75, Rhode Island’s economic momentum for July is providing a “glimmer of hope” in a year that has mostly disappointed to date, University of Rhode Island economist Leonard Lardaro said Monday.
While July’s Current Conditions Index came in eight points below last year’s CCI of 83, it is soaring above the CCI of 50 recorded in June and April, and above every other monthly indicator since January, Lardaro said.
The Current Conditions Index measures the state’s economic performance, or momentum, using 12 different metrics. A CCI indicator greater than 50 indicates economic growth. A value below 50 suggests contraction.
The two indicators that “put a nail in the coffin” by rising sharply in June – benefit exhaustions and new claims for unemployment – declined sharply in July, Lardaro said. Benefit exhaustions rose 30.2 percent and new claims increased 17.2 percent. He had characterized the previous month’s increases as “bizarre.”
“Perhaps things here are beginning to strengthen after all as we move through the second half of 2014,” he speculated.
For July, three other leading indicators improved at healthy rates: single-unit permits for housing were up 26.3 percent; total manufacturing hours rose 3.6 percent; and employment service jobs, which includes temporary employment and is a prerequisite to job growth, rose 1.2 percent. The increase in employment service jobs is the first increase since November of 2013, the report states.
Leading indicators that did not fare so well included the manufacturing wage, which dropped for a fifth month in a row by 4.3 percent, and U.S. consumer sentiment, down for a third consecutive month by 4.3 percent. Government employment fell seven-tenths of a percent in a continuing downward slide, which Lardaro predicted won’t improve “any time soon.”
Other indicators that performed well compared to a year ago included the unemployment rate, which fell 1.9 percent to 7.7 percent and is now third highest in the nation, instead of first or second; retail sales, up 3.3 percent; private service-producing employment, up 2.1 percent; and labor force, up half a percent.

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