SOUTH KINGSTOWN – Rhode Island’s economy “experienced a bit of a setback in December” but continued to show improvement compared with a year earlier, University of Rhode Island economist Leonard Lardaro said as his economic index fell to its lowest level in three months.
The Current Conditions Index fell to 33 in December, down from 50 in November and 42 in October. But Lardaro emphasized that the latest report was not uniformly negative.
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“Rhode Island’s economic performance in December was better than the headline number of 33 indicates,” he said in an e-mail. “As we move closer to a bottom, we can’t reasonably expect to go straight up.”
The Current Conditions Index uses a dozen national and local economic indicators to track the state’s economic performance. A reading of 0 would mean no indicators improved compared with a year earlier, while 100 would mean all 12 improved.
December was the eighth consecutive month that saw Lardaro’s index top its year-earlier level, as four the 12 indicators showed month-over-month improvement, including manufacturing wages, the size of the labor force and new claims for unemployment benefits.
But eight of the 12 indicators posted poorer numbers than a year ago, with employment falling in temporary services (a leading indicator for job growth), government and the private sector.
“At the two-and-a-half-year mark for the current recession facing Rhode Island, our economy continues to have a pulse, we are moving in the right direction, and there is no basis upon which to reject the explanation of a recovery sometime in 2010,” Lardaro said.
But, he added, “recovery will mean we have stopped declining; don’t take this to mean that we will begin to see a sharply increasing pace of economic activity.”
Another index of economic indicators for Rhode Island, the Providence Business News/e-forecasting.com index, improved for an eighth consecutive month in December when it was released earlier this week.
Additional information is available at members.cox.net/lardaro.
