PROVIDENCE – While Rhode Island marked its 17th consecutive month of economic expansion in November, the state’s economy continued to show signs of slowing, University of Rhode Island economist and professor Leonard Lardaro said Wednesday.
The Current Conditions Index that Lardaro publishes each month had a value of 67 in November, down from 75 in October. A CCI value above 50 indicates expansion, while a value below 50 indicates contraction.
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Eight of 12 of the economic indicators Lardaro uses to calculate his index showed improvement from the same period a year ago, but he noted that the four CCI indicators that weakened in November were leading indicators – new claims for unemployment benefits, consumer sentiment, single-unit permits and employment service jobs. Also, retail sales, which Lardaro said has been a “star performer,” posted very slow growth in November.
“The reason I am so concerned about the behavior of these indicators is that none of the first three are survey-based,” Lardaro said. “So it might be revised when the rebenchmarked data appears soon.”
The employment rate and labor force participation rate also declined in November from the month before, Lardaro said.
“So the question now is whether Rhode Island’s performance in August and September (when the CCI was 92) was a fluke or whether and when we return to those levels,” Lardaro said.
Lardaro said Rhode Island’s manufacturing sector “hung in there” in November with total manufacturing hours up by 4.6% year over year and manufacturing wages increasing 4.5% from November 2021.
With only two of 12 of the CCI indicators improving from October to November, Lardaro said it is further evidence of continuing weakness. However, he cautioned that a determination about where the economy is going is made difficult since October and November employment numbers will likely be changed with rebenchmarking.
“It remains too premature to make any calls that Rhode Island is witnessing the first stage of LO (Last Out),” Lardaro said. “Our saving grace might prove to be the large unspent federal funds our state received. When spent, these should boost our rate of growth through much of 2023.”
Year-over-year CCI indicator performance in November:
- Government employment increased 1.6%
- U.S. consumer sentiment declined 15.5%
- Single-unit permits declined 45%
- Retail sales rose 0.6%
- Employment services jobs declined 6.2%
- Private-services production employment rose 1.9%
- Total manufacturing hours increased 4.6%
- The state’s manufacturing wage rose 4.5%
- Unemployment benefit exhaustions declined by 50.6%
- New unemployment insurance claims increased 33%
- The state labor force increased 1.1%.
- Unemployment rate declined 1.1%
