Lardaro: Economic momentum continued in September

SOUTH KINGSTOWN – Rhode Island sustained improvement in September of the economic momentum that had gotten a boost in August, University of Rhode Island economist Leonard Lardaro said Monday.
September’s Current Condition Index, which measures the state’s economic performance, or momentum, using 12 different metrics, measured 75, the same as in July and August.
The CCI of 75 matched the measure recorded a year ago, though it did not exceed it, Lardaro said. That means economic momentum stayed steady for two consecutive months. However, July’s CCI of 75 was lower than 83, the CCI for July of the preceding year. A CCI indicator greater than 50 indicates economic growth, while a value below 50 suggests contraction.
This transitioning to a more broadly based period of recovery is “a big deal, especially for this state,” Lardaro writes in his report. “This is a turning point of sorts. Rhode Island’s recovery thus appears to be on its way to becoming more broadly based.”
Sustaining that momentum in coming months for a state that remains third highest in the nation for unemployment, at 7.6 percent, would mean the state would be further closing the gap between its performance and that of the U.S. economy, he said.
Contributing to the positive performance in September, year over year, were improvements in single-unit permits, up 36.7 percent; new claims for unemployment, down 7.4 percent; employment service jobs, up 2.3 percent; and U.S. consumer sentiment, up 8.7 percent. The new claims indicator has improved for six of the past seven months – “a very healthy sign” moving into the fourth quarter, Lardaro noted.
Offsetting the gains were declines in total manufacturing hours, which fell by three-tenths of a percentage point for the first time in more than a year, and in the manufacturing wage, which dropped by 6.6 percent, Lardaro said.
Still, other indicators remained strong, like retail sales, up 4.7 percent; private service-producing employment, up 1.6 percent; and benefit exhaustions, which reflect longer term unemployment, down 12.3 percent. September was the fifth double-digit improvement for benefit exhaustions in the last six months, Lardaro said.
Labor force also rose by five-tenths of a percent, although it declined relative to August. Government employment was down by seven-tenths of a percent.

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