Lardaro: R.I.’s economy slowed in October

THE STATE'S economy slowed in October, despite marking 19 months of consecutive expansion, University of Rhode Island economist and professor Leonard Lardaro said Thursday.    / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – The state’s economy slowed in October despite marking 19 months of consecutive expansion, University of Rhode Island economist and professor Leonard Lardaro said Thursday.   

The Current Conditions Index he produces each month had a year-over-year value of 75 in October, down from 92 in September, with nine of 12 indicators improving relative to a year ago. 

A CCI value above 50 indicates expansion, while a value below 50 indicates contraction. 

“With the national economy slowing and after such strong economic momentum here, it was to be expected that the pace of activity would slow,” Lardaro said. “”We will need to see what unfolds for the remainder of this year, especially monetary policy changes, to gauge where we go from here.”

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Lardaro said the monthly CCI values had been slipping since April, leading to the expectation that deteriorating monthly performance would eventually translate into the annual changes.

Retail sales and total manufacturing hours, the two star indicators throughout the entire pandemic and post-pandemic period, slowed substantially in October.

Retail sales dropped to 2.1% in October from 3.7% in September. However, Lardaro notes,  it has improved on a yearly basis every month since May 2020.

Total manufacturing hours slowed dramatically in October to 1.2% after 7.7% growth in September.

“Do these instances of slowing growth presage actual declines in the coming months? Quite possibly they might,” Lardaro said.

Two labor supply measures, benefit exhaustions and new claims, improved dramatically in October. Benefit exhaustions, a reflection of long-term unemployment, fell by 48.7%, continuing a trend that began in May 2021. New claims, a leading labor indicator that reflects layoffs that has fallen at double-digit rates since July 2021, declined 38.4% year over year.

Employment-service jobs, a leading labor market indicator, fell 6.3%, erasing several months of improvements.

Payroll employment, which had been improving on a yearly basis, has declined on a monthly basis for the past two months. Lardaro said this could be a problem since it remains well below pre-pandemic levels.

Resident employment, the number of employed Rhode Islanders in state or out of state, has been flat for the past four months, while the employment rate declined in October.

Year-over-year CCI indicator performance in October:

  • Government employment increased 0.9%
  • U.S. consumer sentiment declined 16.6%
  • Single-unit permits declined 12.4%
  • Retail sales rose 2.2%
  • Employment-services jobs declined 3.1%
  • Private-services production employment rose 2.3%
  • Total manufacturing hours increased 1.2%
  • The state’s manufacturing wage rose 5.9%
  • The state labor force increased 1.1%.

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