PROVIDENCE – The Rhode Island economy continued to contract year over year in January but there may be some positive momentum building, according to University of Rhode Island economist Leonard Lardaro.
The annual CCI for Rhode Island was level month to month at 25 but declined from a value of 67 one year prior. A value above 50 indicates expansion, while a value below 50 indicates contraction.
Year over year, three of the 12 indicators that comprise the CCI improved, including single-unit permits, retail sales and the manufacturing wage. All other indicators worsened over the year.
Despite the year to year economic contraction, however, the state did see improvement month to month. Nine of the indicators in the index showing signs of improvement from December. The monthly CCI value was 75, indicating expansion, Lardaro said.
“While none of the monthly growth rates [was] particularly impressive, at least we are moving in the right direction,” Lardaro said. “Our ability to sustain this will ultimately be determined by our ability to implement improvements to our state’s structural baggage.”
“As I have stated for some time now, where we were prior to the pandemic wasn’t all that good, since we had remained largely stuck at the 2015 level of our state’s real GDP,” Lardaro added in the report. “Has Rhode Island done much to change our business climate and to reinvent itself? Generally, no. However, [Gov. Daniel J.] McKee has stated his intention to begin a long-overdue emphasis on small business. Since about 90% of our employers have 30 or fewer employees, why this emphasis wasn’t adopted in deed … for so long is a sad testament to how poorly this state has been run.”
Per recent labor market data revisions, Lardaro said that the data was “anything but flattering,” as, “both measures of employment were even lower than we were led to believe.”
Year over year CCI indicator performance in January:
- Government employment declined 5.8%
- U.S. consumer sentiment declined 20.7%
- Single-unit permits increased 0.8%
- Retail sales increased 9.4%
- Employment services jobs declined 8.6%
- Private service production employment declined 10.6%
- Total manufacturing hours declined 6.9%
- Manufacturing wage increased 8.2%
- Labor force declined 3.9%
- Benefit exhaustions increased 424.9%
- New claims increased 127%
- The unemployment rate increased 3.4 percentage points
Lardaro also noted that the economic impacts of the COVID-19 pandemic have made the Great Recession “look like a minor blip.”
