By Kimberley Donoghue PBN Web Editor Twitter: @kdonog
PROVIDENCE – Despite a slowdown in the national economy, Rhode Island has sustained its economic recovery and expanded at a faster rate than the U.S., according to the Rhode Island Economic Indicator Briefing.
Rhode Island’s economy grew at an an annualized rate of 2.17 percent in the second quarter, compared with the first quarter’s 1.88 percent, according to the publication, which is produced by Bryant University and the Rhode Island Public Expenditure Council.
The organizations combine several measures of economic activity - employment statistics, real wage and salary disbursements, general sales and gross receipts taxes - to come up with the “current economic indicator,” which is calibrated to grow at the rate of the real gross state product and can be interpreted as the “underlying growth rate of the state economy.”
The groups also generate a leading economic indicator that projects the state economy will expand at an annualized rate of 2.2 percent during the next two quarters.
The Ocean State’s economic activity has been bolstered by regional growth and some favorable internal economic conditions, it said, pointing to increased consumption and “modest” improvements in labor market conditions.
The New England economy grew at an annualized rate of 2.28 percent in the second quarter, compared with 2.1 percent in the first, 1.99 percent in last year’s fourth quarter and 1.88 percent in the 2010 third quarter.
The U.S. Gross Domestic Product, by comparison, grew 1.28 percent, increasing from the first quarter’s 0.36 percent but dropping from the fourth quarter’s 2.35 percent.
Initial unemployment claims decreased in the first quarter as employment in some sectors that are susceptible to business cycles increased.
Employment in trade, transportation, and utilities services increased, as employment in leisure and hospitality services reversed losses in the first quarter to expand nearly 12 percent, seasonally adjusted, in the second quarter.
However, employment in the professional and business serves sectors decreased 0.7 percent in the second quarter as the construction sector continued to shed jobs, declining 12 percent.
Real total wages and salary disbursements declined 0.7 percent in the second quarter, compared with a decline of 1.3 percent in the first quarter.
General sales and gross receipt taxes - a proxy for the state aggregate demand - increased 3.42 percent, seasonally adjusted but not annualized, in the second quarter compared with 2.33 percent in the first.
“The Rhode Island economy [is] steadily recovering, but the size of the economy is still smaller than that observed before the 2008 recession. It confirms that a full recovery will take several years at the current growth pace,” the briefing said.
Rhode Island Economic Indicator Briefing,
Rhode Island Public Expenditure Council,