PROVIDENCE – Rhode Island’s economy expanded for the 15th consecutive month in June, showing signs it has truly begun to move past the pandemic, University of Rhode Island economist and professor Leonard Lardaro said Monday.
The Rhode Island Current Conditions Index he produces each month had a year-over-year value of 67 in June. It was the third consecutive month at that level, marking continued expansion.
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A CCI value above 50 indicates expansion, while a value below 50 indicates contraction.
For the second straight month, Lardaro calculated The Rhode Island Current Conditions Index based on a two-year comparison. He said the two-year CCI comparison, looking back to 2020, this year has shown expansion for four consecutive months. Based on this calculation, he said Rhode Island is indeed in the early stages of recovering from the depths of the pandemic.
“This information adds breadth to my analysis by supplementing CCI performance based solely on focusing on where we are relative to one year ago,” Lardaro said. “While all this suggests that Rhode Island’s true overall recovery has indeed begun, the question of whether this momentum will have ‘legs’ is yet to be determined. Fundamental to this is the extent to which both the U.S. and R.I. economies slow as the effects of monetary tightening continue to take hold.”
Only two of the five leading indicators improved in June: total manufacturing hours, a proxy for manufacturing output, rose by a healthy 5.8%, as both weekly hours and employment rose once again. New claims, which reflect layoffs, also improved dramatically with 92.2% decrease. However, weakness in U.S consumer sentiment, single-unit permits and employment service jobs persisted. U.S. consumer sentiment has now failed to improve for 11 consecutive months. Single-unit permits, which reflect new home construction, have now declined for the last six months, a trend Lardaro adds will continue if Fed tightening begins to materially raise mortgage rates.
“The good news is that several key economic variables have regained all or most of what they lost during the pandemic,” Lardaro said. “Most noteworthy among these is resident employment, the number of employed Rhode Island residents, which is about 500 higher than its previous peak.”
The June monthly CCI rose to 83, compared to 42 in May. Lardaro said sustaining this momentum will determine if the FI from FILO still pertains to Rhode Island.
Year-over-year CCI indicator performance in June:
- Government employment increased 0.3%
- U.S. consumer sentiment declined 41.6%
- Single-unit permits declined 24.6%
- Retail sales rose 8.1%
- Employment services jobs decreased 0.5%
- Private services production employment rose 4.1%
- Total manufacturing hours increased 5.8%
- The state’s manufacturing wage rose 5.8%
- The state labor force declined 0.5%
- Benefit exhaustions declined 63.3%
- New unemployment claims declined 92.2%
- The state’s unemployment rate declined 3.5 percentage points.
