Economist Says RI Slowly Climbing Out of Recession
Monday, August 16, 2010
Rhode Island is slowly climbing out of the recession, but it could be headed for more economic trouble in the future, according to Leonard Lardaro, an economist at the University of Rhode Island.
Lardaro’s monthly take on the economic pulse of Rhode Island—known as the Current Conditions Index—puts the state at a ranking of 58 on a scale of 1 to 100 last June. Rankings above 50 show economic growth, while those below that threshold indicate a downturn. Rhode Island is doing quite well compared to June 2009, when the Current Conditions Index was at 33.
“Our state’s economy regained its pulse in mid-2009, as signs of economic life began to return,” Lardaro said. “Since February of this year, we have continued to move ever-closer to the end of this recession, in spite of massive flooding in April.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTSince February, the Current Conditions Index has mostly hovered around 50. When it moves consistently above 50, Lardaro said the recovery will have really begun. But he said the recent slowdown in the national economy could postpone the end of the recession in Rhode Island.
And he warned that things could get worse one year from now. “Next year at this time there will no longer be any federal bailout funds to ‘rescue’ us,” Lardaro said. “Whatever economic momentum we have then will certainly dissipate. Double dip for RI in 2011? I give it a 60 percent chance.”
The Current Conditions Index is based on a measure of how well the economy is doing in 12 areas of activity, such as retail sales, the unemployment rate, new claims for unemployment insurance, the number of single-unit housing permits issued, and manufacturing wages.
In June, the results were mixed for Rhode Island. New claims for unemployment insurance rose by 2.4 percent over June 2009 and jobs in the private sector fell by 8.2 percent. On the other hand, retail sales went up by 4.4 percent and the number of housing permits granted shot up by 38.9 percent.
