Home Economy Economic Activity Lardaro: R.I.’s economy strong in May

Lardaro: R.I.’s economy strong in May

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PBN Staff

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07/16/2024

Lardaro — RHODE ISLAND’S economy appears to be moving out of first gear after experiencing a potential breakout in May, University of Rhode Island economist and professor Leonard Lardaro said Tuesday in his monthly Current Conditions Index report. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Rhode Island’s economy appears to be moving out of first gear after experiencing a potential breakout in May, University of Rhode Island economist and professor Leonard Lardaro said Tuesday in his monthly Current Conditions Index report. The index that Lardaro publishes each month had an expansion value of 75 in May, up from 67

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PROVIDENCE – Rhode Island’s economy appears to be moving out of first gear after experiencing a potential breakout in May, University of Rhode Island economist and professor Leonard Lardaro said Tuesday in his monthly Current Conditions Index report. The index that Lardaro publishes each month had an expansion value of 75 in May, up from 67 in April. A CCI value below 50 indicates economic contraction, while a value above 50 indicates an economic expansion. Lardaro said the CCI exceeded its year-over-year value for the fifth straight month in May. Nine of the 12 indicators improved in May relative to a year ago, with many posting solid advances. One of the leading CCI indicators, employment service jobs, improved in May for the first time since Sept. 2022, while the labor force has risen for the last five months and the employment rate went up again as well, Lardaro said. “Were this to end its several-year downtrend, that would be an important change for Rhode Island,” Lardaro said. “These are critical developments, making Rhode Island’s economy normalize, not relative to pre-pandemic, but to the trends in the national economy.” Lardaro also said the state’s unemployment rate above 4% is a positive and expected outcome, even though many fret about it. "This is a positive and expected outcome, given our rising labor force and participation rates, Lardaro said. “I recommend that everyone ignore the jobless rates recorded over the past few years that were below 4%. They were a byproduct of low labor force participation and a labor force that wasn’t moving in the direction we need it to.” Both total manufacturing hours and manufacturing wage improved in Rhode Island last month, despite it weakening at the national level last month, Lardaro said. Total manufacturing hours rose 6.6% in May, while manufacturing wages went up 6.1%, the latest in a sting on increases that have exceeded the rate of inflation since July. Government employment saw its ninth increase since last September, while single-use permits for new home construction rose in May for the third time in five months, Lardaro said. Employment service jobs, which have fallen on a year-over-year basis since Oct. 2018, rose in May while private service producing employment decelerated again despite improving 1.1% in May. The only bad news in May, Lardaro said, dealt with unemployment. New claims, which has only improved two of the last 16 months, rose 7.3%. Benefit exhaustions, which surged in April 2023 and has increased by double digits in the months after, rose another 7.8% in May. Year-over-year CCI indicators in May:

Employment services jobs increased by 0.9%.

Government employment increased by 0.8%.

Labor force increased by 2.8%.

Manufacturing hours increased by 6.6%.

Manufacturing wages increased by 6.1%.

New unemployment claims increased by 7.3%.

Private service-producing employment increased by 1.1%.

Retail sales increased by 1.1%.

Single-unit permits increased by 7%.

Unemployment benefit exhaustions increased by 7.8%.

Unemployment rate increased 1.7%.

U.S. consumer sentiment increased by 17.2%.