Lardaro: R.I.'s economy continued year-over-year momentum in Sept.


Lardaro: R.I.'s economy continued year-over-year momentum in Sept.

PROVIDENCE - Rhode Island's economy maintained its year-over-year momentum in September, though there were concerns of slowing growth, University of Rhode Island economist and professor Leonard Lardaro said Wednesday in his monthly Current Conditions Index report. The index that Lardaro publishes each month had an expansion value of 75 in September, which was the same as August. A CCI value above 50 indicates an economic expansion while a value below 50 indicates economic contraction. Lardaro said the CCI values have improved year over year every month so far this year except for March. However, he warns the state's economy appears to be starting a trend where there is year-over-year improvement but slower month-over-month growth. "Should that trend continue, then yearly improvement will begin to slow, possibly reversing," Lardaro said. "But we are far away from that eventuality at this time; it is something to keep in mind, though." Nine of the 12 indicators contained in the CCI improved year over year in September, Lardaro said, with labor force, total manufacturing hours and retail sales being the most notable, which was also the same as August. The state's labor force has increased on a yearly basis at nearly a 3% rate since May despite falling on a monthly basis, Lardaro said. The labor force participation rate - the percentage of the resident population in the labor force - remained above 65% in September for only the fourth time since May 2015. "For Rhode Island, that's a big deal," Lardaro said. "Importantly, this trend makes the recent increases in our state's unemployment rate nowhere near as negative as they might appear or what would have been the case had the labor force still been declining." Total manufacturing hours, what Lardaro calls a proxy for manufacturing output, rose 7.5% year over year. "Its growth rates have been substantial since March, as both the workweek and employment continue to rise," Lardaro said. "Importantly, this is the opposite of the national trend." Retail sales rose by a tepid 1.1% year over year in September. Lardro said that sector's growth rates have been strong for almost every month since February. However, like several other variables, on a monthly basis, its levels have fallen for the last two months. Employment service jobs surged 3.7% year over year in September, though new claims failed to improve. Government employment rose year over year for the 13th consecutive month while U.S. consumer sentiment improved following two straight months of yearly declines. Single-unit permits saw its seventh straight year-over-year increase (36.2%) in eight months while benefit exhaustions, which reflects long-term unemployment, surged 52.9% year over year in September. "Hopefully, the stronger growth in employment service jobs, which is related to future hiring, and more rapid growth in private service-producing employment will work to offset some of the weakness in the longer-term unemployment we have been witnessing," Lardaro said. "That will require sustaining recent values, which might not come to pass, as a single month's result does not necessarily paint a roadmap of the future." Year-over-year CCI indicators in September:

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