URI Economist Warns RI Is in a “Growth Recession”
GoLocalProv Business Team
URI Economist Warns RI Is in a “Growth Recession”
Lardaro, in his monthly report released on Monday morning, which scores the strength of the Rhode Island economy 1-100, said, “The February value, 42, is in the contraction range following two months of neutral values. While the deciding factor leading to a 42 was a first annual decline in retail sales, I need to see if that change develops into a well-defined trend.”
“Even if this is not the case, I have stated that I believe Rhode Island is currently in a ‘growth recession,’ where the rate of growth is not sufficient to keep the unemployment rate from rising. Worse yet, our state's employment rate (percentage of the population that is employed - either in or out-of-state) has fallen for nine consecutive months,” he warns.
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Wrong Direction - Retail Sales Decline
“At the end of last year, the Current Conditions Index showed that a marked slowing of the Rhode Island economy was occurring, as its values fell from June through December. This was later confirmed by growth data, as economic growth declined from 3.6 percent in Q3 of last year to 1.9 percent in Q4. At the start of this year, the CCI remained at its neutral value of 50, as only six of the twelve indicators improved relative to a year ago. Still, there were a few indicators that were performing reasonably well, in spite of the two-month string of neutral values,” added Lardaro.
One strength of both the national and regional economy has been retail sales, but that may be ending.
Last week, it was reported that consumer sentiment fell sharply in April, marking the fourth consecutive month of declines, as an intensifying trade war fueled anxiety over American jobs and rising inflation. The University of Michigan's closely watched consumer sentiment index, released Friday, fell 11% to 50.8, the lowest since the depths of the pandemic.
Lardaro raises similar concerns in what he saw in Rhode Island’s numbers: “Then came February. This was an extremely weak month for Rhode Island’s economy. Not only did the CCI fall into its contraction range, 42, as only five of its twelve indicators improved, but the key indicator whose overall performance had remained stellar since the pandemic, retail sales, fell for the first time since May of 2023."
