For the first time in six months, Rhode Island’s unemployment rate dipped below
the national average in the month of September at 5 percent compared to the
national rate of 5.4 percent. But one local economist cautioned that the numbers
might be deceiving.
The unemployment rate for September is also the state’s lowest this year, according to the latest figures from the state Department of Labor and Training, and is 0.5 percent lower than August’s unemployment rate. The number of unemployed Rhode Islanders dropped by 3,000 in September to 28,200. A year ago, unemployment in Rhode Island was at 4.9 percent and the number of people without jobs stood at 28,000.
The unemployment rate has fluctuated from 5.5 percent to 5.8 percent since March, making September’s rate seem much lower, but according to Leonard Lardaro, an economics professor at the University of Rhode Island, a more realistic rate would be 5.3 percent or 5.4 percent.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
“The one number that I trust the least is the monthly change” in unemployment, he said. “It has a history of jumping all over the place with values that are usually revised. I bet a month from now the rate will be 5.3 or 5.4.”
Rhode Island businesses reported a gain of 400 jobs in September, bringing the state’s total job count to 489,600. Month-to-month gains were reported in leisure and hospitality, which added 200 jobs; construction, which added 100 jobs; and government, which reported an addition of 100 jobs.
“We did have a small increase in the number of jobs, and it’s a modest increase as we recoup some of the August job loss,” said Joyce D’Orsi, chief of labor market information projects for the labor department. “A lot of that happens from August to September. Students go back to school, and people who might not have had a job – like parents staying home with their kids during the summer – come back to their jobs.
“Some people are coming in and out of the labor force, and it fluctuates up and down, but some people are always marginally attached to the labor force,” like young people, she said. This impacts a number of jobs added and subtracted from the work force on a month-to-month basis.
But Lardaro argued that there are other forces at work.
“Like the nation, our unemployment rate has gone down, but not for the right reasons,” he said. “Unemployed people are dropping out of the labor force” because they stop looking for a job. “Nationally we’re seeing that trend and that’s unusual, but in Rhode Island this happened a lot in the 1990s – people were dropping out or leaving the state, so it’s not entirely new to us.”
Trade, transportation and utilities was the only sector to report a loss of 400 jobs, a result of traditional job gains in retail trade failing to materialize, according to the labor department (the trends are based on historic employment). Manufacturing and professional and business services employment remained even from August to September, the report said.
D’Orsi stressed that the labor department is “encouraged” by September’s unemployment rate, but was hesitant to say that the reduced rate means the state is back on track and beginning to recover from economic tough times.
“We’re encouraged employment is up, that the number of Rhode Island residents who are employed is up, and that jobs are up,” she said. “We would hope that we’re on the right track.”
But Lardaro said that because the addition of 400 jobs is insignificant to the economy, the state is really at an economic standstill.
“We’re dead in the water,” he said. “Hopefully when the election is over,
some of the uncertainty will be resolved on some things and that will get us
going again, but we’re not going to set the world on fire.”
