SOUTH KINGSTOWN – Following July revisions, eight points were lost month to month in the August Current Conditions Index as the measure declined to 67, according to University of Rhode Island Economist Leonard Lardaro Monday.
“The August value, along with the recent progression, are discouraging as the CCI fell to its lowest value this year in August … the CCI has continually declined since the most recent high of 92 in May,” said Lardaro in the report.
Additionally, the July measure was revised to 75 from its previous 58 which means the August value is the lowest recorded to date in 2018.
Monday’s CCI measurements represent a 25-point decline from 92 to 67 year over year.
Published monthly, the CCI measures 12 economic indicators that are representative of the economic climate of the state. A value above 50 implies economic expansion, while a value less than 50 indicates contraction.
The 67 measured in August, given revisions of the July measure, is the lowest CCI value seen this year and the sixth time the measure did not increase year over year.
In his commentary of the 2018 CCI measure trend, Lardaro said: “Thus far, the third quarter of 2018 hasn’t exactly been a sign of great strength for Rhode Island. Nor has the year 2018 overall for that matter. … While we managed to hit a CCI value of 92 twice thus far this year, overall we have plateaued around last year’s lowest value of 75 throughout most of this year.”
In August, eight of the CCI’s 12 indicators saw improvement, whereas seven had positive results in July.
A more detailed outline of the July performance is listed below, with percentage changes based on year-over-year comparisons:
- There was a 0.7 percent decline in United States consumer sentiment in August following six consecutive improvements.
- Single-unit permits, reflective of new home construction, in Lardaro’s words, “fell very sharply” (49.1 percent) in August – its seventh decline in the past 10 months.
- A 3.0 percent growth was witnessed in retail sales in August.
- A leading labor market indicator, employment service jobs, jumped 4.0 percent in August.
- Private-service producing employment grew by 2.3 percent in August
- Both total manufacturing hours, what Lardaro calls “a proxy for manufacturing output,” and the manufacturing wage grew by 2.75 percent in August.
- There was a 1.2 percent jump in the labor force in August.
- A 9.6 percent decline in benefit exhaustions was measured in August.
- “Further postponing its resumption of a downtrend,” per Lardaro’s commentary, new claims jumped by 6.3 percent in August.
- The state’s unemployment rate fell by 0.4 percentage points in August.
Government employment remained the same from July.
Reviewing what he called a “discouraging” turn, Lardaro posited on whether or not August’s decline could by “the early stages” of the first-in, last-out trend, which has previously befell the Rhode Island economy.
For him, it’s “still too early to tell, but that possibility should be in the back of your mind.”