URI Expert: RI Economy Gaining Momentum
Monday, December 10, 2012
Rhode Island’s economic performance in October was the strongest it has been in a “long, long time,” according to a report released by University of Rhode Island professor Dr. Leonard Lardaro.
“Clearly, Rhode Island’s economy shifted into a higher gear in October,” Lardaro said.
Every month, Lardaro releases his “Current Conditions Index (CCI),” which analyzes the state’s economy based on 12 vital indicators. He valued the month of October at a 75/83 (out of 100), which takes into account the current data and the data he predicts will be revised. In 2011, Lardaro never valued the state above a 67. Its low point was a 42 in August 2011.GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST
Lardaro’s monthly analysis factors government employment, US consumer sentiment, single-unit housing permits, retail sales, employment services jobs, private service-producing employment, total manufacturing hours, manufacturing wage, labor force, benefit exhaustions, new claims, and the unemployment rate.
According to the report, only government employment, employment services jobs and private serving-producing employment didn’t improve in October. The labor force, Lardaro noted, grew for the first time since 2010. The strongest performances came from consumer sentiment and single-unit permits, which both improved by 25 percent.
Still, while Lardaro said he believes the state should be moving away from a long trend of weak economic performances, he said he remains concerned about what Congress’ potential failure to reach an agreement on the fiscal cliff could mean for Rhode Island.
“Should the US fall over the dreaded cliff and remain there for some time, then Rhode Island,
like almost every other state, will inevitably be drawn into the abyss of a national recession,” Lardaro warned.
Lardaro’s report comes just days after another report suggested Rhode Island’s unemployment rate could to remain above 9 percent into 2014.
That report, prepared by University of Rhode Island business professor Dr. Edward Mazze and Bryant University economist Edinaldo Tebaldi, offered a mixed outlook on the state’s economy over the next four years.
“The Rhode Island economy has shown mixed signs of improvement in 2012. Net general sales and gross receipt taxes, a proxy for the state aggregate demand, increased 3.8% over the first 10 months of 2012 compared to the same period of 2011,” the report states. “This suggests that Rhode Islanders have increased spending in 2012, indicating an improvement of overall economic conditions in the state. Employment in construction, manufacturing, leisure and hospitality and financial services has also increased over the year. However, other sectors of the economy are still struggling and have shed jobs over the year, including professional and business services, health care and social assistance, government, and wholesale trade.”
