URI Economist Issues Warning About RI Economy—Is He Right?
Tuesday, June 20, 2023
URI Economist Len Ladaro has tough words for state leaders (L-R) Senate President Ruggerio, Speaker Shekarchi, and Governor McKee
On the other side is economist Leonard Lardaro.
And Lardaro is taking aim at Rhode Island politicians.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe University of Rhode Island economist is hitting their claims with data -- and says the Rhode Island economy is far weaker than the political narrative.
Lardaro on Record
“In other states, a declining labor force during a recovery is a cause for concern. Not in RI. Our elected officials actually benefit from this - they hide behind the artificially low unemployment rate it creates as people presume it is job gains that are causing the low rate,” said Lardaro.
“Rhode Island's enabler: a secular downtrend in its labor force participation rate (percentage of the population in the labor force). This explains how we went from double-digit unemployment rates to values below the national average,” Lardaro said.
“To some extent, this is influenced by the rising average age of our population. How much so? Is that the whole story? I tested this econometrically and found the downtrend still exists even after controlling for changes in the average age of the RI population,” according to Lardaro.
Lardaro’s Report
Lardaro states the following:
"The April Current Conditions Index value of 33 is very clearly in the contraction range. This follows contractionary readings of 42 in both January and March (with a neutral value of 50 in December). I truly wish it was possible for me to say that this month’s reading was a “strong” 33, but I cannot. Only four of the
twelve CCI indicators improved in April and a couple of them barely managed to eek out gains, improving at rates far below what we had witnessed over the last year. Clearly, the two “star” indicators throughout the pandemic and post-pandemic period, most notably Retail Sales and Total Manufacturing Hours, have faltered. While Retail Sales barely managed to improve in April (+0.5%), in real (inflation-adjusted) terms, it has been
falling for a while. Given its fluctuations of late, it is not clear at this point whether it remains in an uptrend. Total Manufacturing Hours, a proxy for manufacturing output, has now declined for the last five months with both the length of the workweek and employment falling.
Looking at a broad range of economic indicators for Rhode Island over the last year, one sees very few areas of strength in the aggregate data. However, aggregate data can and often does mask very different behaviors upon disaggregation. Parts of Rhode Island’s economy, those related to the higher end of the income spectrum, continue to do quite well. The same is becoming increasingly less true for average to below-average-income Rhode Islanders.
If we do have recession here, and I now place the odds of that as being fairly high, it will be one where aggregate activity masks remaining areas of strength. Perhaps it might be called a “recession in a box,” or “I can’t believe it’s not a recovery.” Sadly, our current economic performance is entirely consistent with our state’s history of being FILO [first in, last out]."
Related Articles
- Lardaro Report: RI’s July Economic Conditions Rank Best of 2019
- Lardaro Report: RI Finishes 2nd Quarter on “Somewhat Upbeat Note”
- Lardaro Report: RI’s Economic Activity Slows
- Lardaro Report: RI’s Economy Is Not As Weak As It Appears
- Lardaro Report: RI’s Economy Regains Momentum in October
- Lardaro Report: RI is Not That Far Away From a Recession
- Lardaro Report: RI’s Economic Momentum Down, But Not Out
- Lardaro: RI Economy Closes 2018 on Downbeat Note
- Lardaro Report: RI’s Revised Labor Market Data
- Lardaro Report: RI’s Abysmal February Economic Performance
- Lardaro Report: RI Economy Closes 1st Quarter on Note of Concern
- Lardaro Report: RI’s Economy Struggles to Sustain Momentum
- Lardaro Report: RI Economy’s December Performance Was Best of 2019
- URI Economist Lardaro Says RI Economy Shows “Vast Improvement” But “Raises a Flag of Caution”
- URI Economist Lardaro Says RI Economy “Might” be on Rebound
- Lardaro: RI Is in a “Restoration” and Not a Recovery
- Lardaro: Economy Improves, But Recovery Is Uncertain
- URI Economist Lardaro’s Index Shows RI’s Economy Stabilizing
- URI Economist Lardaro Says RI’s Job Market Is Far Worse Than During “Great Recession”
- Lardaro: “3 to 5 Years Before Rhode Island Returns to Its Pre-Pandemic” Economy
- Lardaro Report: RI Enters Recession in “Relatively Weak Position”
- Lardaro Report: Has Rhode Island’s Economy Hit Bottom?
- Lardaro: Is RI’s Economy Showing Any Sign of Life?
- RI’s Economy Remains in Severe Contraction - Lardaro Report
