Home Economy Economic Activity Lardaro: R.I. began 2026 in a recession

Lardaro: R.I. began 2026 in a recession

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04/09/2026

Lardaro-1-1-1-1 — UNIVERSITY OF Rhode Island economist and professor Leonard Lardaro said the state began 2026 in a recession. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – The state’s economy began 2026 in a recession, University of Rhode Island economist and professor Leonard Lardaro said Thursday in his monthly Current Conditions Index report. The Current Conditions Index for January was 42, same as the revised December value of 42. A CCI value above 50 indicates an economic expansion compared to

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PROVIDENCE – The state’s economy began 2026 in a recession, University of Rhode Island economist and professor Leonard Lardaro said Thursday in his monthly Current Conditions Index report. The Current Conditions Index for January was 42, same as the revised December value of 42. A CCI value above 50 indicates an economic expansion compared to the previous year while a value below 50 indicates economic contraction. January was the 10th time in the past 13 months the CCI fell below 50. Lardaro concludes Rhode Island is in a recession even though the revised labor market data had mixed results for the state. “Despite all the labor data revisions, where levels were often higher, rates of change, which define momentum, were little changed,” Lardaro said. “Cyclical momentum is based on rates of change, not levels themselves, so the overall macroeconomic picture isn’t very different from what it was prior to the labor market data revisions.” Retail sales, which Lardaro says is a critical economic indicator that has been a strength through almost the entire post-pandemic period, improved by 4.8% year over year while total manufacturing hours grew 9%. The star performer of the CCI indicators, retail sales grew by just under 5% for the most recent two months, a clear acceleration from the prior two months, Lardaro said. “This is not an indicator subject to revisions," he said. "It is a key variable to follow in the coming months, given its importance as an economic indicator.” Benefits exhaustion, which Lardaro said indicates long-term unemployment, improved for the first time since July, dropping 4.8% year over year. The state’s labor force has failed to improve since May 2025, falling 0.6% in January. Employment service jobs, what Lardaro calls a leading market indicator, fell 1.1%. Government employment decreased 8.6% in January. That sector has failed to improve over the last eight months, Lardaro said. Year-over-year CCI indicators in January:

Employment-service jobs decreased by 1.1%.
Government employment decreased by 3.9%.
Labor force decreased by 0.6%.
Total manufacturing hours increased by 9%.
Manufacturing wages decreased 2.3%.
New unemployment claims decreased by 1.4%.
Private-service-producing employment decreased by 0.7%.
Retail sales increased by 4.8%.
Single-unit permits decreased by 8.6%.
Unemployment benefit exhaustions decreased by 4.8%.
Unemployment rate was unchanged.
U.S. consumer sentiment decreased 21.7%.