Osborne Jackson, senior economist with the Federal Reserve Bank of Boston, offered a generally positive image of Rhode Island’s and New England’s current economic status at the first Economic Trends Summit hosted Feb. 15 at the Providence Marriott Downtown by Providence Business News.
Jackson demonstrated to the audience that important benchmarks, such as employment, labor-market participation, housing prices and consumer confidence, are in generally healthy condition in Rhode Island, tracking similar trends in the United States and New England.
The big dive in nearly all economic indicators across the country happened with the Great Recession, which opened a pit under the economy in 2008. Since then, however, trends have moved upward.
Jackson said his conclusions from the data are: Labor markets in New England remain tight, with growth in employment, and low unemployment; core inflation is about 2 percent; housing-price growth continues; and while consumer sentiment about the economy is fairly positive, expectations about the future have declined.
Two people from JPMorgan Chase & Co. in Boston attended the summit to get a feel for the economic winds in the Ocean State in advance of a planned expansion to Rhode Island. Dev Singh, vice president, said JPMorgan expects to open a private banking office in Providence in 2020. He and Ryan McGrath, executive director and market team lead, both said they were encouraged by what they heard from Jackson, and even a little surprised.
‘This gives me more conviction to expand to Rhode Island.’
RYAN MCGRATH, JPMorgan Chase & Co. executive director
“It is encouraging to see Rhode Island’s employment ticking up,” said Singh, citing local expansions of businesses such as Virgin Pulse Inc. and Infosys Ltd. “This indicates opportunities here.”
As of December 2018, the unemployment rate was 3.9 percent in the United States and Rhode Island and 3.4 percent in New England, according to Jackson’s data. The Providence-Warwick-Fall River metropolitan area showed a decline in unemployment to 4 percent in December 2018 from 4.5 percent one year prior.
“I would have thought that Silicon Valley or Boston would have outpaced Rhode Island” in measures of unemployment, McGrath said, and added, “This gives me more conviction to expand to Rhode Island.”
According to Jackson’s data, employment growth rates lagged in Rhode Island compared with the U.S. and Boston. The annual long-term trend from 1984 to 2017 shows growth of 1.5 percent for the U.S., 0.9 percent for New England and 0.7 percent for Rhode Island. The trend from December 2017 through December 2018 shows employment growth of 1.8 percent for the U.S., 1.5 percent for New England and 1.4 percent for Rhode Island.
Jackson’s data for state employment growth by industry, expressed in percent change from December 2017 to December 2018, showed Rhode Island up 4.8 percent in construction; up 3.2 percent in retail trade; up 2.3 percent in professional services; up 1.9 percent in education and health; up 1.6 percent in information; and up 6.6 percent in “other services.”
In Rhode Island, housing prices rose 8.5 percent from the third quarter of 2017 to the third quarter of 2018, the largest percent rise in New England and more than the increase of 6.3 percent for the U.S.
Consumer confidence, which Jackson’s figures expressed for U.S. and New England but not for individual states, showed confidence slipping as people look to the future. The baseline for the index is 100, pegged to 1985. The current level of confidence is about 120 in the U.S. and a little below 100 in New England. Looking to the future, the index is 87 in the U.S. and 69 in New England.
