Home Economy Economic Activity Lardaro: Despite encouraging signs, R.I. in a recession

Lardaro: Despite encouraging signs, R.I. in a recession

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PBN Staff

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12/12/2025

Lardaro-1-1-1 — UNIVERSITY OF Rhode Island economist and professor Leonard Lardaro said in his monthly Current Conditions Index report that the state is in a recession, despite encouraging signs in September. /PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Even though the economy showed signs of improvement in September, the state is in a recession, University of Rhode Island economist and professor Leonard Lardaro said Friday in his monthly Current Conditions Index report. The index, which was delayed by the federal government shutdown, had a neutral value 50 in September, up from 33 posted in August. A CCI value

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PROVIDENCE – Even though the economy showed signs of improvement in September, the state is in a recession, University of Rhode Island economist and professor Leonard Lardaro said Friday in his monthly Current Conditions Index report. The index, which was delayed by the federal government shutdown, had a neutral value 50 in September, up from 33 posted in August. A CCI value above 50 indicates an economic expansion while a value below 50 indicates economic contraction. Lardaro said there were several signs in September that make the economy appear better than the neutral value. However, he said the key challenge now is determining how long the recession will last in Rhode Island. “Unfortunately, our fate rests largely in the hands of monetary and fiscal policy, both of which we have no control over,” Lardaro said. “So, while we are beginning to see some favorable monthly movements, the CCI defines our cyclical status based on the performance of its 12 factors taken together on an annual basis. On this front, we still have a ways to go, even with a promising few months. While the number of positives may well be increasing, there are still enough negatives to keep us in a recession.” Six of the 12 CCI indicators improved year over year in September, Lardaro said, with some suggesting an underlying momentum that could overcome Rhode Island’s yearlong subpar performance. Labor force data improved for the third consecutive month, despite declining year over year. Also, resident employment, which has been declining year over year as well, has been rising monthly since July. Both the employment rate and labor force participation rate increased for the third-straight month in September, which Lardaro said paints a more favorable picture for the unemployment rate. “While [the unemployment rate] remains well above 4%, it too has been declining since July, and along with a rising [monthly] labor force, this is not necessarily negative,” Lardaro said. “I can also point out that if we move from the “official” and largely meaningless unemployment rate, even the far more valid participation-adjusted unemployment rate fell in September to 5.8%, from 6.1% in August.” Total manufacturing hours and manufacturing wages improved year over year in September. Total manufacturing hours grew at a very healthy 5%, following a strong 4.6% growth rate in August, as both manufacturing employment and the workweek expanded, Lardaro said. New claims, which Lardaro said are related to layoffs, increased by 3.5% year over year in September, sustaining its uptrend trend while employment-service jobs, a leading labor indicator that deals with future employment, rose sharply year over year, by 3.5%. Year-over-year CCI indicators in September:

Employment-service jobs increased by 3.5%.

Government employment increased by 0.5%.

Labor force decreased by 0.3%.

Total manufacturing hours increased by 5%.

Manufacturing wages increased by 1.8%.

New unemployment claims increased by 3.5%.

Private-service-producing employment increased by 0.4%.

Retail sales increased by 2.2%.

Single-unit permits decreased by 23.5%.

Unemployment benefit exhaustions increased by 32.7%.

Unemployment rate stayed the same as August.

U.S. consumer sentiment decreased 21.4%.