Home Economy Economic Activity Lardaro: R.I.’s economy accelerated in August

Lardaro: R.I.’s economy accelerated in August

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PBN Staff

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10/18/2024

Lardaro-1 — RHODE ISLAND’S economy showed strength in August, accelerating year over year, University of Rhode Island economist and professor Leonard Lardaro said Friday in his monthly Current Conditions Index report. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Rhode Island’s economy showed strength in August, accelerating year over year, University of Rhode Island economist and professor Leonard Lardaro said Friday in his monthly Current Conditions Index report. The index that Lardaro publishes each month had an expansion value of 75 in August, up from 67 in July. A CCI value above 50 indicates

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PROVIDENCE – Rhode Island’s economy showed strength in August, accelerating year over year, University of Rhode Island economist and professor Leonard Lardaro said Friday in his monthly Current Conditions Index report. The index that Lardaro publishes each month had an expansion value of 75 in August, up from 67 in July. A CCI value above 50 indicates an economic expansion while a value below 50 indicates economic contraction. “The Current Conditions Index has sustained levels at or above year-earlier values for seven of the eight months this year,” Lardaro said. “And, while the ... index fell to 67 in July following its significant uptrend, the August value of 75 shows that some of the lost momentum might well be returning.” Nine of the 12 indicators contained in the CCI improved year over year in August, Lardaro said, with three, labor force, total manufacturing and retail sales, the most notable. The state’s labor force, Lardaro said, has increased on a yearly basis close to 3% since May, while the labor force participation rate, the percentage of the resident population in the labor force, remained above 65% in August for only the third time since May 2015. “This trend makes the recent increases in our state’s unemployment rate nowhere near as negative as they first appeared or what would have been the case had the labor force still been declining,” Lardaro said. “Recent jobless rates above 4% are where we have realistically been for quite some time. The past strings of sub-4 values were merely statistical artifacts of low labor force participation that has now [thankfully] ended.” Total manufacturing hours, a proxy for manufacturing output, increased 8.7% year over year, Lardaro said, adding that sector's growth rates have been substantial since March, as both the workweek and employment have continued to rise. “Importantly, this is bucking the national trend! Interestingly, though, growth in the manufacturing wage slowed in August to 2.1%, below the rate of inflation,” Lardaro said. Retail sales, which Lardaro calls a key indicator of Rhode Island’s economic health, rose “at a very rapid” 5.6% and had strong growth since February. However, Lardaro warns there were signs of weakening in August. Employment service jobs, which had risen four consecutive months prior, slowed in August. Layoffs, in terms of new claims, did improve in August, but for only the second time since February. Benefit exhaustions, which Lardaro said reflect long-term unemployment, have now increased at double-digit rates every month since April 2023. “The negative trend in benefit exhaustions and the issue of longer-term unemployment might be with us for some time,” Lardaro said. “So, the overall assessment of Rhode Island’s economic performance remains upbeat, but with several areas to watch that might weaken further in the coming months and slow our overall economic momentum.” Year-over-year CCI indicators in August:

Employment service jobs increased by 0.3%.

Government employment increased by 2.5%.

Labor force increased by 3.1%.

Manufacturing hours increased by 8.7%.

Manufacturing wages increased by 2.1%.

New unemployment claims decreased by 5.3%.

Private service-producing employment increased by 1.3%.

Retail sales increased by 5.6%.

Single-unit permits increased by 7.5%.

Unemployment benefit exhaustions increased by 11.1%.

Unemployment rate increased 1.7%.

U.S. consumer sentiment decreased by 2.8%.