PROVIDENCE – Rhode Island’s economy sputtered a bit in March after showing signs of gaining momentum in February, University of Rhode Island economist and professor Leonard Lardaro concluded Friday in his monthly Current Conditions Index report.
The index that Lardaro publishes each month had an expansion value of 58 in March, down from 76 in February. A CCI value below 50 indicates economic contraction, while a value above 50 indicates an economic expansion.
Lardaro said the March CCI of 58 went back to where it has largely remained since August of 2023, dampening hopes of a potential breakout seen in February.
Still, there were reasons for optimism, according to Lardaro.
"Aggregate numbers can be misleading, so it is always critical to look at the overall picture, potentially clarifying the 'signals' from those aggregate numbers," he said. "So, while in the aggregate Rhode Island’s economy appears to be stuck in first gear, there are many positive factors occurring."
The number of Rhode Island-based jobs passed its prepandemic value and has sustained 2% annual growth rates, he noted. And the number of employed Rhode Island residents has now surpassed its prepandemic level as well. The employment rate (resident employment as percentage of population) has also been rising in the last several months.
Overall, seven of the 12 CCI indicators improved with both strong and weak performances.
Lardaro said most significantly the state’s labor force rose 2% in March, the eight consecutive monthly increase and signaling unemployed persons are returning to the workforce, which both helps ease labor shortages but causes the jobless rate to rise.
“Even though the official unemployment rate rose (to 4%) in March, my participation-adjusted unemployment rate fell to 4.6%, as the employment and labor force participation rates both rose,” Lardaro said.
Total manufacturing hours continued to improve in Rhode Island, despite slowing nationally and manufacturing wage increased more than 8% in March.
However, three important CCI indicators – new claims, employment service jobs and benefit exhaustions – continued their negative performances in March.
New claims, a leading labor market indicator rose to a 12% rate in March and has only improved for two of the last 14 months.
Employment service jobs have fallen on a yearly basis for every month since October 2018.
Benefit exhaustions, which reflects longer-term unemployment, has increased at double-digit rates every month since April 2023, and rose another 21.5% in March compared with March 2023..
Year-over-year CCI indicators in March:
- Employment-services jobs decreased by 6.8%.
- Government employment decreased by 0.9%.
- Labor force increased by 2%.
- Manufacturing hours increased by 8.8%.
- Manufacturing wages increased by 8.4%.
- New unemployment claims increased by 12.3%.
- Private-service producing employment increased by 1.7%.
- Retail sales increased by 9.7%.
- Single-unit permits decreased by 15.5%.
- Unemployment benefit exhaustions increased by 21.5%.
- Unemployment rate increased 1.3%.
- U.S. consumer sentiment increased by 28.4%.
