Lardaro Report: Current Conditions Index Report Rises in June
Len Lardaro, URI Professor of Economics
Lardaro Report: Current Conditions Index Report Rises in June
Underlying this was yet another strong month for labor market data. As was true for May, virtually all of the key labor market numbers in June moved in the direction we want them to move and for the right reasons. This was especially true for our Unemployment Rate which was once again accompanied by an improving Labor Force (both on a monthly and yearly basis). For Rhode Island, as strange as this might sound, that’s a big deal, since our state’s Labor Force had until recently been declining for two consecutive years (on a year-over-year basis). Ironically, this meant that the dramatic declines in our state’s UnemploymentRate were largely spurious, since they were generally occurring in spite of improving employment, driven primarily by a Labor Force that continued to trend lower. While we have still only recovered about 70 percent of the jobs lost during the last recession, the pace at which these lost jobs are being recovered now appears to be accelerating.
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Rhode Island’s June economic performance really was quite good. Nine indicators improved overall, which included four of the five leading indicators contained in the Current Conditions Index. New home construction, in terms of Single-Unit Permits, improved for the first time since the harsh winter weather ended, moving above 1,000 annual units (seasonally adjusted), its highest value since February of 2013. Even better, it finally exceeded its twelve-month average. Total Manufacturing Hours, a measure of manufacturing sector strength, also declined in June (-1.8%), its third consecutive decline, but it did have a very difficult comp to beat from last June (+4.4%). All of the remaining leading indicators contained within the CCI improved in June. US Consumer Sentiment rose at a double-digit rate (+16.6%) for the ninth consecutive month. Employment Service Jobs, which includes temporary employment and is a prerequisite to employment growth, improved at its most rapid rate since last August (+5.5%). This was its fourth consecutive improvement, and it occurred in spite of a very difficult comp from last June. Finally, New Claims, a leading labor market indicator that reflects layoffs, fell by 16.7 percent in June, sustaining its well-defined downtrend.
Retail Sales turned in another strong performance in June (+6.1%), following a double-digit rise in April and a 9.7 percent gain in May. This indicator has now improved for fourteen consecutive months. Private Service-Producing Employment increased by 2 percent in June, its most rapid growth rate since last August. Its rate of improvement has been accelerating for the past three months. Government Employment again failed to improve, declining by 1.3 percent for June, its worst performance in over a year. Benefit Exhaustions, which reflects longer-term unemployment, fell by 22.8 percent relative to last year. For those into fiction, Rhode Island’s Manufacturing Wage declined for the sixteenth consecutive time in June (-5.3%). Rhode Island’s Labor Force sustained the end of its two-year string of year-over-year declines, rising by a hefty (for us) 0.6 percent in June. And, for only the second time in a very long time, Rhode Island’s Unemployment Rate declined, this month to 5.9 percent (from an upwardly revised 6 percent in May), accompanied by large jumps in both resident employment (+13,500 or 2.6% year-over-year) and payroll employment (5,700 or 1.2%), along with a substantial decline in the number of unemployed (9,900 or 23.1%). Let’s hope our state’s Labor Force has now begun to increase on a sustained basis.
Rhode Island’s economy appears to be transitioning to a more rapid rate of economic growth based not only on two solid months of labor market data, but the fact that the CCI has now matched or exceeded its year-earlier value for the most recent four months. Most im-portantly, this is occurring in spite of the fact that our state literally did nothing for several years. What we are witnessing now are the combined forces of our state’s economy continuing to heal and the benefits we are deriving from national and neighboring state mo-mentum. The good news is that the recently enacted legislation should prolong this once its effects begin to be felt later this year.
RI Business Rankings in US
WalletHub
Rhode Island has 2015's eighth highest insurance premium penalties for high risk drivers, according to a WalletHub report.
Rhode Island ranks fifth overall in the category of speeding over 20 mph annual premium increase at $482. While ranking third overall in the category of 2 accidents annual premium increase at $2,721.
Rhode Island ranks ninth overall under the reckless driving annual premium increase at $749.
WalletHub
Rhode Island has been ranked as the 8th most eco-friendly state in the country, according to a recent study by WalletHub.
Rhode Island ranks third in environmental quality and 16th in Eco-Friendly Behaviors Ran landing them in 8th overall.
RI is behind Washington and New Hampshire who are in the six and seven spots respectively, and in front of Connecticut and Hawaii who come in at the nine and ten spot.
WalletHub
Rhode Island is 2015's 4th Worst State to be a taxpayer, according to a recent WalletHub report.
Rhode Island ranks 48th of 51 with an average state and local tax price of $7,159 which is good for a 27% difference from the national average.
The states that are directly behind Rhode Island are Wisconsin at $7,159, Nebraska at $7,298 and Illinois at $7,719 for a 37% difference from the national average.
WalletHub
Rhode Island has the highest vehicle property taxes in the country, paying an average of $1,133 according to a report from WalletHub.
Virginia and Kansas are the two states just ahead of Rhode Island in the 49 and 50 spots, paying $962 and $905 respectively.
RI also ranks 42nd in average real estate tax, paying an average of $2,779, according to the WalletHub report.
WalletHub
WalletHub has ranked Rhode Island as the 7th worst state to be rich in in a recent in depth analysis of 2015's Best States to be Rich or Poor From a Tax Perspective.
On a scale with 1 being the best, and 25 being average, Rhode Island ranks 37th in low income earners, 42 in middle income earners and 45th in high income earners.
To see the full report, click here.
Gallup
Providence-metro ranks at the bottom for job creation in 2014
Rhode Island has been ranked amongst the worst in job creation, according to a recent survey done by Gallup.
Gallup gives the Prov-metro area an index score of 23, the lowest score is the New York- New Jersey area with 20.
Salt Lake City, Utah and Austin-round Rock, Texas rank the highest with a score of 37.
See the rest of the rankings here.
Forbes
The 2014 state rankings by Forbes has just been released and Rhode Island moved up two spots from #48 in 2013 to #46 in 2014.
What does Forbes say about RI's business environment"
After Michigan and Illinois, Rhode Island has experienced the third worst net migration out of its state in the country over the past five years. With a recent unemployment rate of 7.6%—lower than only Georgia and Mississippi—residents are leaving the state in search of jobs. Rhode Island has been stuck in the bottom five overall for six straight years. One plus: labor costs are 5% below the national average, which stands out in the expensive Northeast.
Tax Foundation
Findings from The State Business Tax Climate Index were released this morning by Tax Foundation which found Rhode Island to have the 45th best tax climate for businesses for 2015. The state's rank has not changed since last year after The Index analyzed 100 different tax variables in multiple categories.
Read more about the report here
WalletHub
After conducting an online suvery consisting of 1,050 individuals from both parties across the nation, WalletHub ranked Rhode Island as having America's 33rd fairest tax system.
Click here to view the poll's entire findings
Thumbtack/Kauffman
Providence is the second worst city in America for small business, according to a new survey conducted by Thumbtack.com and the Kauffman Foundation.
More than 12,000 small businesses in 82 cities across the country participate in the survey. Providence received an overall "F" grade for small business friendliness.
The Economist
Small Business Friendliness Grade: F
The Economist grades states on an A+ to F grading scale for its small business climate. Rhode Island is one of just 6 states to earn an "F" grade.
Overbearing bureaucracy and excessive licensing is stifling small business in America.
Read More About The Economist Grade Here
CNBC
CNBC ranks each state in cost of doing business, economy, technology and innovation.
Rhode Island's unemployment rate as of May 2014 was 8.2 percent. This is RI's lowest unemployment rate since August 2008.
Read More About CNBC Ranking Here
Forbes
Forbes ranks each state in business costs, economic climate, and growth prospects. RI is third worst in 2013.
The most damning in the commentary:
After Michigan, Rhode Island has experienced the second worst net migration in the country over the past five years.
Read More About Forbes Ranking Here
ChiefExecutive.net
#39 ChiefExecutive.net
ChiefExecutive.net ranks each state in taxations and regulations, workforce quality, and living environment.
The most damning in the commentary:
Sky-high unemployment rate bespeaks continuing terrible business climate.
Read More About ChiefExecutive.net Ranking Here
Tax Foundation
#46 Tax Foundation
Tax Foundation ranks each state in corporate tax rank, sales tax rank, and unemployment insurance tax rank.
Rhode Island and the other states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.
Read More About Tax Foundation Ranking Here
Wallet Hub
#24 Wallet Hub
Wallet Hub ranks each state in ROI rank, state tax rank, and overall government services.
Rhode Island ranked #50 for worst roads and bridges, but ranked #4 in safety.
Read More About Wallet Hub Ranking Here
ALEC
#47 ALEC
ALEC ranks each state in economic performance and outlook.
Although Rhode Island ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.
Read More About ALEC Ranking Here
Kauffman Foundation
#50 Kauffman Foundation
Kauffman Foundation ranks each state in entrepreneurship.
Entrepreneurial activity generally is highest in Western and Southern states
and lowest in Midwestern and Northeastern states.
Read More About Kauffman Ranking Here
Free Enterprise
#47 Free Enterprise
Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.
Rhode Island has continued to feel the direct impact and ripples from the recent recession—it ranks 47th overall in economic performance. However, positive rankings of 15th in talent pipeline and 16th in innovation and entrepreneurship suggest the existence of a foundation on which to build the future.
Read More About Free Enterprise Ranking Here
The Pew Charitable Trusts
#40 The Pew Charitable Trusts
The Pew Charitable Trusts ranks each state in job growth and job creation.
Rhode Island added 6,223 jobs in 2014.
Read More About The Pew Charitable Trusts Ranking Here
Gallup
10th Worst in Gallup's Annual Ranking of State Job Markets 2014
Rhode Island has been ranked 10th worst for job creation in Gallup's annual ranking of state job markets in 2014 with a job creation index number of 21
Rhode Island is one of two (Connecticut) states to rank in the bottom ten each year since 2008.
The 2014 State level findings have were drawn from 201,254 interviews with employed adults across the nation.
See the full list of rankings here.
