Lardaro Report: A Bounce Back
Monday, July 14, 2014
GoLocalProv Business Team
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URI Economist Len Lardaro
In his most recent report, URI Economist Len Lardaro presents an encouraging future outlook of economic activity. The Current Conditions Index rose to 67 in May after three consecutive 58 values. The May Index matches its January value.
The Current Conditions Index rose to 67 in May after three consecutive 58 values. The May Index matches its January value.
Lardaro states, "While Rhode Island’s overall performance in 2014 has been somewhat disappointing, perhaps the May bounce will turn out to be the beginning of a prolonged period of stronger economic activity driven in large part by an improving national economy. Clearly, there have been a number of positives during the first part of this year, most notably improvements in both payroll and resident employment, and along with the latter, a full percentage point decline in our state’s Unemployment Rate."
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Lardaro's Current Conditions Index:
Yet inspite of this good news, Rhode Island’s performance continues to lag in terms of several metrics, the most obvious being the #1 national ranking of our state’s jobless rate that has been sustained for far too long a period. So, while our state’s absolute economic performance continues to improve, its relative performance remains problematic. Sadly, this trend hardly something new. I will continue to describe the overall economic performance of Rhode Island’s economy as precarious, citing the fact that May was the tenth consecutive month where the CCI failed to improve relative to its year-earlier value.
For May, only three of the five leading indicators contained within the Current Conditions Index improved, but two of those did so at healthy rates. Fortunately, the two that failed to improve do not necessarily signal any real weakness in our state’s economy or the possibility of a transition to slower growth. US Consumer Sentiment fell by 3.1 percent in May, ending a string of five consecutive increases. This decline very likely reflected stock market performance that has since reversed. Employment Service Jobs, which includes temporary employment, and is a prerequisite to employment growth, fell by another 1.1 percent in May, its sixth consecutive decline. Suffice it to say that I continue to view changes in this indicator somewhat suspiciously.
Unemployment Insurance, the timeliest measure of layoffs, declined, albeit slowly in May, for a third consecutive month and sixth time in the last seven months. In spite of its recent improvements, it is not yet clear whether this indicator has resumed the longer-term downtrend that will be critical to our sustaining May’s overall momentum in the coming months.
Retail Sales remained strong in May, rising by just under 5 percent compared to a year ago. This indicator has now improved for eleven of the last twelve months. Based on its recent performance, it is one of the strongest CCI indicators. Benefit Exhaustions, which reflects longer-term unemployment, improved at a double-digit rate in May (-13.1%), registering its second consecutive double-digit improvement.
Government Employment fell once again, declining by 0.2 percent versus last May. Its level has clearly plateaued around 60,000, which was its May value. Finally, Rhode Island’s Labor Force actually rose in May, by a mighty 0.02 percent. Prior to this month, the last time the Labor Force rose was last April. Along with this encouraging Labor Force change came a significant drop in our Unemployment Rate, all the way from 9.5 percent last May to “only” 8.2 percent this year, still #1 nationally.
The Bottom Line
Rhode Island’s May performance could be a sign that our state is at long last in the process of regaining the momentum we witnessed at the end of 2012. Will this recovery become more broadly based than it has become of late or will we revert to where we have been during the first part of 2014? The first true sign of improvement will be our ability to exceed year-earlier CCI values, something we haven’t done for ten consecutive months. True improvement will mean that our state’s economic performance will not only be gaining momentum in absolute terms (looking only at us) but in relative terms as well (compared to the nation).
Related Slideshow: Rhode Island’s Most Unemployed Cities and Towns
Below are the unemployment rates for Rhode Island's 39 cities and towns from August 2013.
The statewide average for the month was 9.1% -- the third highest rate in the country.
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#39 Narragansett
Latest Unemployment Rate: 6.0
Labor Force: 9,244
Employed: 8,688
Highest Rate in Last Two Years: 9.0 (January 2012)
Lowest Rate in Last Two Years: 5.6 (September 2012, June 2013)
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#37 (Tie) Jamestown
Latest Unemployment Rate: 6.5
Labor Force: 3,014
Employed: 2,818
Highest Rate in Last Two Years: 9.5 (February 2012)
Lowest Rate in Last Two Years: 5.7 (June 2013)
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#37 (Tie) New Shoreham
Latest Unemployment Rate: 6.5
Labor Force: 1,507
Employed: 1,409
Highest Rate in Last Two Years: 30.9 (February 2012)
Lowest Rate in Last Two Years: 5.0 (August 2011)
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#36 Barrington
Latest Unemployment Rate: 6.8
Labor Force: 8,211
Employed: 7,651
Highest Rate in Last Two Years: 8.8 (August 2011)
Lowest Rate in Last Two Years: 6.4 (April, May, July 2013)
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#35 Richmond
Latest Unemployment Rate: 6.9
Labor Force: 4,316
Employed: 4,018
Highest Rate in Last Two Years: 8.5 (February 2012)
Lowest Rate in Last Two Years: 5.2 (May 2013)
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#34 Glocester
Latest Unemployment Rate: 7.2
Labor Force: 5,893
Employed: 5,470
Highest Rate in Last Two Years: 10.7 (February 2012)
Lowest Rate in Last Two Years: 6.4 (June 2013)
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#33 North Kingstown
Latest Unemployment Rate: 7.3
Labor Force: 15,033
Employed: 13,939
Highest Rate in Last Two Years: 10.5 (January, February 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#32 Little Compton
Latest Unemployment Rate: 7.4
Labor Force: 1,904
Employed: 1,763
Highest Rate in Last Two Years: 12.4 (January 2012)
Lowest Rate in Last Two Years: 6.9 (April 2013)
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#31 Middletown
Latest Unemployment Rate: 7.5
Labor Force: 7,917
Employed: 7,325
Highest Rate in Last Two Years: 13.5 (January 2012)
Lowest Rate in Last Two Years: 7.1 (June 2013)
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#30 Portsmouth
Latest Unemployment Rate: 7.6
Labor Force: 9,362
Employed: 8,651
Highest Rate in Last Two Years: 11.5 (January 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#28 (Tie) Bristol
Latest Unemployment Rate: 8.0
Labor Force: 12,455
Employed: 11,457
Highest Rate in Last Two Years: 10.6 (January 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#28 (Tie) Westerly
Latest Unemployment Rate: 8.0
Labor Force: 11,917
Employed: 10,961
Highest Rate in Last Two Years: 11.2 (February 2012)
Lowest Rate in Last Two Years: 6.8 (September 2012)
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#27 Smithfield
Latest Unemployment Rate: 8.3
Labor Force: 11,781
Employed: 10,799
Highest Rate in Last Two Years: 10.4 (August 2011, February 2012)
Lowest Rate in Last Two Years: 5.7 (June 2013)
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#25 (Tie) Foster
Latest Unemployment Rate: 8.4
Labor Force: 2,701
Employed: 2,475
Highest Rate in Last Two Years: 13.4 (February 2012)
Lowest Rate in Last Two Years: 7.9 (June 2012)
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#25 (Tie) N. Smithfield
Latest Unemployment Rate: 8.4
Labor Force: 3,014
Employed: 2,818
Highest Rate in Last Two Years: 9.8 (August 2012)
Lowest Rate in Last Two Years: 7.4 (December 2012)
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#23 (Tie) Coventry
Latest Unemployment Rate: 8.6
Labor Force: 20,279
Employed: 18,537
Highest Rate in Last Two Years: 11.1 (August 2011, February 2012)
Lowest Rate in Last Two Years: 7.1 (June 2013)
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#23 (Tie) Cumberland
Latest Unemployment Rate: 8.6
Labor Force: 19,055
Employed: 17,422
Highest Rate in Last Two Years: 10.4 (August 2011, July 2012)
Lowest Rate in Last Two Years: 7.4 (June 2013)
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#20 (Tie) Newport
Latest Unemployment Rate: 8.7
Labor Force: 12,885
Employed: 11,763
Highest Rate in Last Two Years: 14.1 (January 2012)
Lowest Rate in Last Two Years: 7.2 (September 2012)
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#20 (Tie) Warwick
Latest Unemployment Rate: 8.7
Labor Force: 46,308
Employed: 42,297
Highest Rate in Last Two Years: 9.5 (February 2012)
Lowest Rate in Last Two Years: 10.4 (August 2011)
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#20 (Tie) West Greenwich
Latest Unemployment Rate: 8.7
Labor Force: 3,678
Employed: 3,359
Highest Rate in Last Two Years: 11.7 (February 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#19 East Greenwich
Latest Unemployment Rate: 8.9
Labor Force: 6,784
Employed: 6,178
Highest Rate in Last Two Years: 11.0 (February 2012)
Lowest Rate in Last Two Years: 7.5 (June 2013)
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#15 (Tie) Charlestown
Latest Unemployment Rate: 9.0
Labor Force: 4,506
Employed: 4,099
Highest Rate in Last Two Years: 14.2 (January 2012)
Lowest Rate in Last Two Years: 7.1 (June 2013)
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#15 (Tie) Lincoln
Latest Unemployment Rate: 9.0
Labor Force: 11,781
Employed: 10,717
Highest Rate in Last Two Years: 10.4 (February 2012)
Lowest Rate in Last Two Years: 7.9 (November 2012, June 2013)
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#15 (Tie) South Kingstown
Latest Unemployment Rate: 9.0
Labor Force: 16,455
Employed: 14,982
Highest Rate in Last Two Years: 10.6 (January 2012)
Lowest Rate in Last Two Years: 7.8 (September 2012)
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#15 (Tie) Warren
Latest Unemployment Rate: 9.0
Labor Force: 5,908
Employed: 5,377
Highest Rate in Last Two Years: 12.0 (February 2012)
Lowest Rate in Last Two Years: 7.6 (June 2013)
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#14 Exeter
Latest Unemployment Rate: 9.2
Labor Force: 3,865
Employed: 3,509
Highest Rate in Last Two Years: 11.7 (March 2012)
Lowest Rate in Last Two Years: 7.6 (September 2011)
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#13 Tiverton
Latest Unemployment Rate: 9.3
Labor Force: 8,882
Employed: 8,058
Highest Rate in Last Two Years: 12.0 (January, February 2012)
Lowest Rate in Last Two Years: 7.4 (June 2013)
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#10 (Tie) Cranston
Latest Unemployment Rate: 9.5
Labor Force: 41,657
Employed: 37,682
Highest Rate in Last Two Years: 11.3 (July 2012)
Lowest Rate in Last Two Years: 8.8 (April 2013)
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#10 (Tie) East Providence
Latest Unemployment Rate: 9.5
Labor Force: 24,677
Employed: 22,339
Highest Rate in Last Two Years: 12.6 (January, February 2012)
Lowest Rate in Last Two Years: 8.7 (June 2013)
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#10 (Tie) West Warwick
Latest Unemployment Rate: 9.5
Labor Force: 16,240
Employed: 14,693
Highest Rate in Last Two Years: 12.9 (February 2012)
Lowest Rate in Last Two Years: 8.4 (June 2013)
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#8 (Tie) Hopkinton
Latest Unemployment Rate: 9.8
Labor Force: 4,888
Employed: 4,411
Highest Rate in Last Two Years: 11.2 (February 2012)
Lowest Rate in Last Two Years: 6.6 (June 2012)
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#8 (Tie) North Providence
Latest Unemployment Rate: 9.8
Labor Force: 18,130
Employed: 16,347
Highest Rate in Last Two Years: 11.3 (August 2011)
Lowest Rate in Last Two Years: 8.5 (April 2013)
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#7 Burrillville
Latest Unemployment Rate: 10.0
Labor Force: 9,526
Employed: 8,570
Highest Rate in Last Two Years: 11.6 (February 2012)
Lowest Rate in Last Two Years: 8.0 (June 2013)
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#6 Scituate
Latest Unemployment Rate: 10.4
Labor Force: 6,166
Employed: 5,527
Highest Rate in Last Two Years: 11.2 (July 2012)
Lowest Rate in Last Two Years: 8.4 (June 2013)
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#5 Johnston
Latest Unemployment Rate: 10.5
Labor Force: 15,645
Employed: 14,004
Highest Rate in Last Two Years: 12.9 (February 2012)
Lowest Rate in Last Two Years: 9.2 (June 2013)
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#4 Pawtucket
Latest Unemployment Rate: 11.1
Labor Force: 36,412
Employed: 32,378
Highest Rate in Last Two Years: 13.7 (July 2012)
Lowest Rate in Last Two Years: 10.2 (June 2013)
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#3 Woonsocket
Latest Unemployment Rate: 11.2
Labor Force: 20,730
Employed: 18,409
Highest Rate in Last Two Years: 13.6 (January 2012)
Lowest Rate in Last Two Years: 10.7 (June 2013)
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#2 Providence
Latest Unemployment Rate: 11.5
Labor Force: 80,605
Employed: 71,362
Highest Rate in Last Two Years: 14.3 (August 2011)
Lowest Rate in Last Two Years: 10.4 (May 2013)
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#1 Central Falls
Latest Unemployment Rate: 12.1
Labor Force: 8,348
Employed: 7,341
Highest Rate in Last Two Years: 15.3 (January, February 2012)
Lowest Rate in Last Two Years: 11.4 (April 2013)
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