RIPEC Report Points to Mixed Economic Data, Despite RI's 35 Year Record-Low Unemployment

RIPEC Report Points to Mixed Economic Data, Despite RI's 35 Year Record-Low Unemployment

Rhode Island’s unemployment rate hit its lowest point in 35 years in September, but according to the Rhode Island Public Expenditure Council, “our local economy experienced mixed results across key economic indicators.”

The Rhode Island Key Performance Indicators (KPI) Briefing for the second quarter of 2023, released Monday, was developed by The Center for Global and Regional Economic Studies at Bryant University and RIPEC.

The study found that “non-farm employment (Rhode Island-based jobs) fell for the second straight quarter, and six of the state’s nine major industry sectors lost jobs.”

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On the positive side, the state’s labor force participation rate grew, the number of employed Rhode Islanders increased, and net sales tax receipts, an indicator of demand in the economy, experienced a 4.1% increase (seasonally adjusted).

“The data this quarter emphasize an important economic trend in Rhode Island: the growing divergence between the number of employed Rhode Islanders and Rhode Island-based jobs,” said Michael DiBiase, President and CEO of RIPEC. “There were about 48,000 more employed Rhode Islanders than there were Rhode Island-based jobs before the pandemic, but that difference shot up to about 60,000 at the beginning of the pandemic (Q2 2020) and stood at 61,400 in this most recent quarter. It is encouraging that the number of employed Rhode Islanders have recently grown to surpass pre-pandemic levels, but we have only recovered 88.0 percent of Rhode Island-based jobs lost during the pandemic, suggesting some vulnerability in the state’s economy, particularly given that New England and the U.S. have regained all lost jobs.”

Two weeks ago, Governor Dan McKee hyped the job numbers.

"We’re pleased to see growth in the state’s labor force and the number of working Rhode Islanders for the sixth consecutive month,” said McKee. “Rhode Islanders are hard at work, reflecting a thriving economy and underlining the state's commitment to economic development and employment opportunities. As more Rhode Islanders find meaningful employment, the entire community benefits. Increased employment opportunities not only improve the quality of life for individuals and families but also contribute to the overall prosperity and well-being of the state.” 

Rhode Island non-farm employment was down quarter-over-quarter by 700 jobs and year-over-year by 5,100 jobs, with the state having 10,700 fewer Rhode Island-based jobs than before the pandemic. In contrast, the New England region and the U.S. both experienced non-farm employment growth in Q3 2023. Only three of Rhode Island’s nine major industry sectors gained jobs in Q3—construction, manufacturing, and education and health services—and only two have higher employment levels than before the pandemic: construction and manufacturing.

The number of employed Rhode Islanders increased by 4,300 in Q3 2022, a growth rate of 0.8% that exceeds the growth experienced by New England (0.1%) and the United States (0.3%). Employment in Rhode Island is 0.5 percent greater than pre-pandemic levels, compared to 2.4% growth nationwide and a decrease of 1.5% in New England.