Lardaro: RI Economy Closes 2018 on Downbeat Note

Monday, February 11, 2019

 

View Larger +

Len Lardaro

Rhode Island closed out 2018 on a rather downbeat note. After beginning the year with fairly strong economic performances during several months, things noticeably deteriorated in the second half. Negatives changes increasingly emerged, gaining significance relative to positive factors, causing the magnitudes of changes in various indicators to slip quite a bit. Most notably, during one month, the Current Conditions Index registered a contraction value (42 in October). Even with an upgrade to November’s value (from 58 to 67 based on Single-Unit Permits), the CCI only managed to exceed year-earlier values for two months throughout all of 2018. The CCI ended the year with a neutral value of 50, a decrease from November yet another confirmation of a decelerating Rhode Island’s economy.

Evidence of a slowing Rhode Island economy is becoming increasingly abundant. Our state’s Labor Force reached its most recent peak in August, along with labor force participation rate, the percentage of the working-age population in the Labor Force. Both have trended downward on a monthly basis since that time, indicating that a number of the second-half improvements in our state’s Unemployment Rate occurred for the wrong reasons. Related to this is the behavior of our employment rate, the percentage of our working-age population that is employed. That rate had been stuck at 62.3 percent since August, then slipped to 62.2 percent in December, remaining well (5%) below its prior cyclical peak of 65.4 percent all the way back in January of 2007! One of the most disturbing trends concerns New Claims, the timeliest measure of layoffs. These have now risen for four of the most recent six months, reflecting the likelihood that a trend of rising layoffs may well be occurring. Total Manufacturing Hours, a proxy for manufacturing output, has now declined for the most recent three months. The Manufacturing Wage has fallen for the most recent four months. The list of disappointments goes on and on.

Unless labor market data rebenchmarking reverses many of these disturbing changes, the debate concerning whether Rhode Island is moving ever closer to a recession cannot be dismissed. Since we are FILO, and the national and global economies are slowing, continually monitoring our state’s economic condition has become more important than it has been in a long time.

View Larger +

For December, only six of the twelve CCI indicators improved. Individual indicator performances were generally weaker than November, and only two of the five leading indicators contained in the CCI improved. Since the recent May high, the CCI has not gone straight down. But having two of the three fourth-quarter CCI values either in the contraction or neutral range is a cause for concern.

New Claims, as stated earlier, performed badly in December, rising at a double-digit rate (+11.3%), its fourth increase in the last six months. Rhode Island’s goods-producing sector’s performance was very disappointing yet again in December. Total Manufacturing Hours, which reflects manufacturing output, fell for the third consecutive month (-4.3%). Along with this, the Manufacturing Wage declined again (-1.5%). Single- Unit Permits, which reflect new home construction, fell for the sixth time in the last seventh months (-4.9%) (my estimate since data is still unavailable due to the government shutdown). Employment Service Jobs, a leading labor market indicator that includes temporary employment, improved again (+1.7%) but at a slower rate than November. US Consumer Sentiment rose in December (-2.6%) for the first time in three months.

As noted earlier, both of the “left behind” indicators, the employment rate and the labor force participation rate, failed to improve again in December. Both remain well below their prior cyclical highs (see table). It is quite possible that neither will surpass their prior highs during this entire cycle.

Retail Sales grew strongly again in December (+4.0%), Government Employment fell from its level a year ago for a fourth consecutive month (-0.2%), Private Service-Producing Employment growth rose by 2 percent, and Benefit Exhaustions, the timeliest measure of longer-term unemployment, rose sharply in December (+14.7%). The Unemployment Rate remained below 4 percent, driven largely by a Labor Force that fell for the third consecutive time on a monthly basis.

View Larger +

 

Related Slideshow: 19 to Watch in 2019 - FULL LIST

View Larger +
Prev Next

Brian Goldner

No one will influence the psyche of Rhode Island more this year than Hasbro CEO Brian Goldner. After the loss of the PawSox to Worcester and the closing of Rhode Island’s beloved Benny's in 2017, Rhode Islanders are a bit raw.

He is poised to announce that Hasbro is...READ MORE

View Larger +
Prev Next

Cortney Nicolato

New United Way of Rhode Island  President and CEO Cortney Nicolato succeeded Anthony Maione in 2018 — and takes on her first full year at the helm of the social service organization in 2019. 

She is a Rhode Islander turned Texan returned back to Rhode Island. The Pawtucket native is all about Rhode Island and is passionate about helping to improve issues of housing affordability and the quality of education in RI. She is the mother of two elementary school-aged children. READ MORE

View Larger +
Prev Next

Sabina Matos

It is the rise of the Phoenix in Providence. On Monday, Sabina Matos won back the Presidency of the Providence City Council and returns to the top legislative position in the City of Providence.

As Providence goes so goes Rhode Island. Matos will be faced with taking on some of the most difficult issues in the state. READ MORE

View Larger +
Prev Next

Jamie Bova

The Newport City Councilor At-Large lined up the votes to votes for Mayor after being elected to just her second term on the Newport City Council this past November. 

Bova, an engineer who grew up in Middletown, attended URI, and moved to Newport in 2012, succeeds Harry Winthrop as the city faces major changes ahead for 2019, including the construction of a new hotel on Thames Street — and more hotel proposals in the pipeline — and READ MORE

View Larger +
Prev Next

Jennifer Wood

The former private practice attorney turned top government aide turned non-profit director might have her biggest — and most public — battle on her hands in 2019. 

RI Center for Justice Executive Director Jennifer Wood joined GoLocal News Editor on GoLocal LIVE where she spoke to the next steps after filing a federal class-action lawsuit in late November on behalf of all Rhode Island public school students to establish the right, under the U.S. Constitution, to an adequate education to prepare young people for full civic education.

READ MORE 

View Larger +
Prev Next

Catholic Church Sex Abuse Survivors

In 2018, Bishop Tobin with the Diocese of Providence landed on GoLocal's “18 to Watch” as the Catholic Church was  — and continues to remain — at the center of lawsuits pertaining to the collapse of the St. Joseph pension fund.

He’ll remain squarely in the spotlight — and not for good — in 2019, when he has pledged to release a list of names of abusive priests “credibly accused” over the years in the Diocese, as pressure mounts nationally for how sexual abuse claims were handled around the country — READ MORE

View Larger +
Prev Next

Matt Voskuil

One of Newport’s most iconic — and upscale — dining locations has a new look, a new chef — and people are taking note not just in Newport, but beyond. 

Executive Chef and Director of Food and Beverage, Matt Voskuil at the newly opened Cara at the Chanler READ MORE

View Larger +
Prev Next

David Torchiana

The most powerful person in healthcare in Rhode Island may soon be a man who rarely visits the state and few here know his name.

Dr. David Torchiana is the CEO of Partners HealthCare and he is poised to push through an acquisition of Rhode Island’s second largest hospital group, ending the local control over three of Rhode Island’s most important healthcare assets. And, the deal has the potential of putting in peril thousands of Rhode Island jobs through consolidation. READ MORE

View Larger +
Prev Next

RI GOP Party Chair

Rhode Island Republican Party Chair Brandon Bell was defeated in his run for the General Assembly in 2018.

Republican Cranston Mayor Allan Fung lost in his second attempt at the Rhode Island Governor’s office, after a bruising primary that saw former opponent and House Minority Leader opt to endorse former Republican-turned-independent (and honorary chair for President Donald Trump’s campaign in Rhode Island) Joe Trillo.  READ MORE

View Larger +
Prev Next

Anthony Baro

Anthony Baro heads Newport-based PowerDocks — one of Rhode Island’s most interesting startups. It is a market-making green tech company that, in many ways, combines the best of Rhode Island.

The emerging maritime renewal energy company is having an impact in the U.S. and globally. READ MORE

View Larger +
Prev Next

Blake Filippi

Blake Filippi is the new House Minority leader and is a fresh-faced leader for the GOP in Rhode Island. But, he faces a number of challenges. READ MORE

View Larger +
Prev Next

Desmond Cambridge

Brown University sophomore basketball player Desmond Cambridge has been a human highlight film his first year and a half on College Hill. He won Ivy League Freshman of the Year and this year he is READ MORE

View Larger +
Prev Next

Sarah Markey

South Kingstown School Board member Sarah Markey has been at the center of controversy since her election in November.

Markey, a top labor leader for the RI National Education Association, has drawn criticism by Democrats, Republicans and multiple municipal attorneys because READ MORE

View Larger +
Prev Next

Peter Neronha

Peter Neronha, the new Attorney General, takes over for the controversial Peter Kilmartin. The former U.S. Attorney for Providence now faces a far busier assignment than his federal one. READ MORE

View Larger +
Prev Next

Marcela Betancur

Marcela Betancur, the new head of Latino Policy Institute at Roger Williams University and will be the power behind Latinx think tank in 2019.

Betancur, a Central Falls native, most recently worked READ MORE

View Larger +
Prev Next

Angie Armenise

Chef and co-owner of Blackie’s Bulldog Tavern in Smithfield, Angie Armenise has it all going. Expansion to a new and larger location, a wonderfully loyal customer base and a big stack of awards -- and more to come in the new year. READ MORE

View Larger +
Prev Next

Dylan Conley

Dylan Conley seems to be everywhere. Recently, GoLocal featured the attorney as one of Rhode Island's "Emerging Leaders."

He is the chairman of the Providence Board of Licenses and is in a hotbed READ MORE

View Larger +
Prev Next

Mike McGovern

Chef Mike McGovern -- formerly the chef at Red Stripe -- is taking the helm at East Greenwich's Kai Bar -- and now 241 Main Sports Bar and Grill. 

Kai Bar is a combination of small plates and big drinks, “Kai offers a rotating small plates menu from an award-winning Chef and Craft Cocktails READ MORE

View Larger +
Prev Next

BIg Tourism Voids

Tourism is one of the most important sectors of the Rhode Island economy and two of the most important positions in the state are now vacant. READ MORE

 
 

Enjoy this post? Share it with others.

 
 

Sign Up for the Daily Eblast

I want to follow on Twitter

I want to Like on Facebook

X

Stay Connected — Free
Daily Email