Home Economy Economic Activity Lardaro: State’s economy gained momentum in April

Lardaro: State’s economy gained momentum in April

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PBN Staff

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06/14/2024

Lardaro-1-1 (1) — UNIVERSITY OF RHODE Island economist and professor Leonard Lardaro said Rhode Island’s economy gained momentum in April, suggesting the potential to break beyond “first gear” in his monthly Current Conditions Index report. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Rhode Island’s economy gained momentum in April, suggesting the potential to break beyond “first gear,” 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 67 in April, up from 58 in March.

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PROVIDENCE – Rhode Island’s economy gained momentum in April, suggesting the potential to break beyond “first gear,” 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 67 in April, up from 58 in March. A CCI value below 50 indicates economic contraction, while a value above 50 indicates an economic expansion. “There was a lot to be optimistic about in April’s performance,” Lardaro said. “For 2024, the CCI has exceeded its year-earlier value for two of the last four months, something we haven’t seen for a while.” Labor market trends were strong in April, Lardaro said. The state’s labor force continued to improve monthly and yearly. The labor force participation rate, which has risen the last four months, reached 62% in April and the state’s employment rate also increased, topping at 62% as well, a critical development according to Lardaro. “While the rising labor force and participation rate have caused the unemployment rate to rise, 4.1% in April, it has now officially [in my mind] shed its status as being a naïve rate, Lardaro said. “Not only does the rising labor force and participation rate bring persons back into the labor force, which should help ease labor shortages, it raises Rhode Island’s potential output, which holds the promise of allowing us to continue moving beyond the pre-pandemic slump in the rates of economic growth we experienced.” Overall, eight of the 12 CCI indicators improved year over year in April. Most had solid advances, even retail sales which appeared to be weakening, Lardaro said. Of the five leading indicators contained in the CCI, three improved in April, although all did so from relatively easy comps. Retail sales only improved 1.1% year over year. However, Lardaro said, this slow growth rate followed a 9.7% rate of growth in March. Total manufacturing rose sharply at 8.3% in April due to a longer workweek and greater unemployment. Manufacturing wage increased more than 6% year over year, the latest in a string of increases that have exceeded the rate of inflation since last July. General employment went up for the eighth consecutive month and private service-producing employment accelerated in April. U.S. consumer sentiment sustained its double-digit rate in April and single-use permits rose for the second time in four months. However, not all of April’s news was good news, Lardaro said. New claims, a leading labor market indicator, has only improved two of the last 15 months and employment service jobs, which has fallen on a yearly basis since October, dropped an additional 1.5% in April. Benefit exhaustions surged in April of 2023 and has has increased at double-digit rates every month since then, rising by another 44.5% in April compared to a year ago. “April is the best we have seen in a while as a number of key variables that define our state’s cyclical economic momentum are showing strength and [hopefully] sustainable future trends,” Lardaro said. “While there were a few ‘dark clouds,” hopefully they will not be enough to derail this momentum for some time. Still, our future economic momentum rests largely with the national economy.” Year-over-year CCI indicators in April:

Employment-services jobs decreased by 1.5%.

Government employment increased by 2.8%.

Labor force increased by 2.4%.

Manufacturing hours increased by 8.3%.

Manufacturing wages increased by 6.7%.

New unemployment claims increased by 15.9%.

Private service-producing employment increased by 2.2%.

Retail sales increased by 1.1%.

Single-unit permits increased by 2.4%.

Unemployment benefit exhaustions increased by 44.5%.

Unemployment rate increased 1.4%.

U.S. consumer sentiment increased by 21.4%.