PROVIDENCE – Rhode Island appears to be moving out of its "statistical recession" due to economic improvements that occurred between August and November, University of Rhode Island economist and professor Leonard Lardaro said in his monthly Current Conditions Index report on Thursday.
The index that Lardaro publishes each month had an expansion value of 58 in November, an improvement from the neutral value of 50 in October.
A CCI value below 50 indicates economic contraction, while a value above 50 indicates an economic expansion.
“This, by itself, is an improvement over what we have seen through most of this year," Lardaro said. “Better yet, after remaining in the contraction range from March through July, the CCI has moved to the neutral or expansion range for all four months since. Our cyclical economic momentum is therefore increasing and, hopefully, what we are witnessing is a transition beyond the doldrums of late 2022 through the first part of 2023.”
Seven of the 12 CCI indicators improved year over year in November, including government employment, U.S. consumer sentiment, single-use permits, retail sales, manufacturing wage, labor force and unemployment rate.
Single-use permits rose at a double-digit rate – 23.1% – after falling on a yearly basis since August 2022, Lardaro said. However, the most important change in November, Lardaro said, is that Rhode Island’s labor force has risen for three straight months.
"If this persists, it would likely cause Rhode Island’s unemployment rate to rise on a monthly basis, as unemployed persons reenter the labor force,” Lardaro said. “This would begin a movement from artificially low rates, based on low labor force participation [which remains below its late 2006 level], to values more reflective of the labor market slack that actually exists."
Despite the good news, Lardaro said three of the five leading economic indicators contained in the CCI failed to improve: total manufacturing hours, employment service jobs and new unemployment claims failed to improve.
New claims, a leading indicator reflective of layoffs, failed to improve for second straight month and total manufacturing hours dropped for the 12th consecutive month.
Employment service jobs, which include “temps,” and is a leading economic indicator of job gains, have now declined for 14 consecutive months.
“Has Rhode Island emerged from its statistical recession? As of November, the answer is very possibly yes as it appears that improving momentum may be moving us away from that designation,” Lardaro concluded. “Upcoming revisions to the labor market data will shed light on how much underlying economic momentum Rhode Island’s economy actually possesses as we move to year’s end.”
Year-over-year CCI indicators in November:
- U.S. consumer sentiment increased by 8.4%.
- Employment-services jobs decreased by 5.4%.
- Government employment increased by 1.1%.
- Labor force increased by 1.4%.
- Manufacturing hours declined by 1.8%.
- New unemployment claims increased by 8.5%
- Private-services production employment decreased by 0.3%.
- Retail sales increased by 2.7%.
- Single-unit permits increased by 23.1%.
- Unemployment benefit exhaustions increased by 4.4%.
- Unemployment rate fell by 0.4%
