Lardaro Report: A Disappointing Year

Lardaro Report: A Disappointing Year

Lardaro states, "Looking at the CCI for all of 2014, one has to conclude that this year is turning out to be a real disappointment. If I had to summarize Rhode Island’s current economic performance with one word, that word would be precarious."

Lardaro's Current Conditions Index:

The non-event bounce back from the adverse effects of the harsh February weather we witnessed in March apparently continued into April. The April Current Conditions Index remained stuck at its same value since February, 58. This extends the string of consecutive months where the CCI has failed to improve relative to its year-earlier value to nine.

This should not be viewed as indicating that there are no positive forces at work here. Look at how much payroll employment has been rising: for March, Rhode Island added 7,600 jobs while only losing 900, for a net change of 6,700. Clearly, the pace of job growth has accelerated here of late while job loss has diminished to levels far below what we experienced during The Great Recession. Yet in spite of this, and recent healthy declines in our state’s Unemployment Rate, we remain well below our prior employment peak of December of 2006 and our jobless rate is still the highest in the nation. Worse yet, Rhode Island’s image has suffered nationally: we have now come to be known as “the unemployment rate state.” Not only can we do better than this, we have to! The clock continues to run. Some promising legislative changes have emerged from the Rhode Island House. Let’s hope the Senate follows suit.

For April, only three of the five leading indicators contained within the Current Conditions Index improved, some by healthy rates. The two that failed to improve do not signal any real weakness or transition to noticeably slower growth. Single-Unit Permits, which reflect new home construction, the indicator most adversely impacted by winter weather, stumbled in April, declining by 4.5 percent after bouncing back with a healthy 20.2 percent increase in March. Employment Service Jobs, which includes temporary employment, and is a prerequisite to employment growth, fell 1.0 percent in April, its fifth consecutive decline. Let’s just say I continue to view changes in this indicator suspiciously.

New Claims for Unemployment Insurance, the timeliest measure of layoffs, declined for the second consecutive month and fifth time in the last seven months. In spite of these recent improvements, it is not yet clear whether this indicator has resumed the longer-term downtrend that will be needed if we are to improve activity levels significantly in coming months. Total Manufacturing Hours, which measures strength in our manufacturing sector, rose sharply in April (+4.0%), as the workweek rose by a full hour and manufacturing employment increased by 600. It was odd to see that in spite of this manufacturing momentum, the Manufacturing Wage actually fell by 1.9 percent in April. Finally, US Consumer Sentiment rose by 10 percent in April, its fifth increase following three consecutive months of declines.

Retail Sales, which apparently never experienced the anticipated adverse weather effects, remained strong in April, rising by another 3.1 percent. This indicator has improved for ten of the last twelve months. Its recent performance gives places it among the strongest CCI indicators. Benefit Exhaustions, which reflects longer-term unemployment, improved in April (-24.8%), after failing to improve in March. March was the only time this indicator has failed to improve in over a year. Private Service- Producing Employment rose by 1.4 percent in April. Its growth rates have remained above the one-percent level since January. Government Employment fell once again, declining by 0.2 percent versus last April. Its level has clearly plateaued around 60,000. Finally, Rhode Island’s Labor Force declined yet again, this time by 0.5 percent. The last time the Labor Force rose was April of 2013. Along with this decline came a significant drop in our Unemployment Rate all the way to “only” 8.3 percent, still #1 in the nation.

The Bottom Line

As the CCI’s performance through 2014 shows, Rhode Island’s current recovery has continued to become less broadly based, as evidenced by the fact that the CCI has now failed to exceed its year- earlier value for nine consecutive months. Unfortunately, our state’s cyclical negatives are gaining strength, in spite of the fact Rhode Island is doing better on several fronts, most notably payroll employment. The unfortunate effect is a dissipating our state’s overall economic momentum, something we can ill afford given that we remain far below our prior employment peak and our jobless rate remains the highest in the US in spite of its recent improvements.

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Rhode Island's Most Unemployed Cities and Towns

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)

#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)