Lardaro: R.I. economy continues to contract

THE RHODE ISLAND Current Conditions Index had a value of 25 in December, indicating contraction, according to University of Rhode Island economist Leonard Lardaro. / PBN FILE PHOTO/MICHAEL SALERNO
THE RHODE ISLAND Current Conditions Index had a value of 25 in December, indicating contraction, according to University of Rhode Island economist Leonard Lardaro. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Rhode Island’s economic performance continued to contract in December, according to an economic index released Monday by University of Rhode Island economist Leonard Lardaro.

The state’s Current Conditions Index value was 25 for the month, level with the value in November but a decline from a value of 83 in December 2019. A value above 50 indicates economic expansion and a value under 50 indicates contraction. The CCI is based on 12 state and national economic indicators.

Lardaro said that the “depth of decline” in Rhode Island is “shocking,” but noted that there may be good news on the horizon if the state sees positive gains in upcoming labor market data revisions. Still, Lardaro predicted that it will take Rhode Island three to five years to recover to pre-pandemic levels.

Lardaro did not provide CCI year-over-year data, but he provided a comparison of December data to February 2020 data, reflecting December’s data as compared with data from before the panademic. Nine of 12 indicators in the state declined in that time. The three improvements included retail sales, single-unit building permits and the manufacturing wage.

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In February, the state CCI value was 75, which declined sharply to 33 in March when the COVID-19 pandemic was declared. The index has remained at 25 or less since that time.

Month to month in December, seven of the 12 indicators in the CCI improved, offset by a decline in five indicators.

Lardaro also took aim at the state’s leadership, saying that Rhode Island should expect “more and lagging growth” if officials continue to “hide behind misleading statistics, telling us always to focus on the positive.”

“That’s not leadership,” Lardaro said. “It’s denial, a major reason why our economy has continued to do so badly.”

“Rhode Island’s economic mediocrity is a logical and predictable outcome of the way things are and are not done here,” he added.

December CCI indicators as compared with February 2020:

  • Government employment declined 5.3%
  • Consumer sentiment declined 22%
  • Single-unit permits increased 4.7%
  • Retail sales increased 3.6%
  • Employment service jobs declined 19.3%
  • Private service producing jobs declined 10.5%
  • Manufacturing employment declined 1.5%
  • Manufacturing hours declined 0.3%
  • Manufacturing wage increased 7.7%
  • Labor force declined 2.9%
  • New claims for Unemployment Insurance increased 621.2%
  • Unemployment rate increased 138.2%
  • U.S. payroll employment declined 9.1%
  • U.S. resident employment declined 7.7%

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