URI’s Lardaro: RI Economy Has Worst Monthly Showing Since Great Recession

URI’s Lardaro: RI Economy Has Worst Monthly Showing Since Great Recession

University of Rhode Island economist Leonard Lardaro says the most recent numbers from his monthly report show significant decay in the health of the Rhode Island economy.

“This was the worst monthly showing since the Great Financial Crisis. The CCI went from a neutral value in January to two months of contraction. The March value, however, was only 16, as two of the twelve CCI indicators improved relative to a year ago, and barely at that,” said Lardaro.

Lardaro said, “Last month, I stated that I could no longer rule out the possibility that Rhode Island had entered the earliest stages of a full-blown recession. I have updated that to stating that I would be amazed if Rhode Island is not currently in the early stages of a full-blown recession. Remember, this month's results, as bad as they were, came before the tariff war in April, so we can't reasonably expect much upward momentum from the national economy.”

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Not an Aberration

“It is possible that March’s data is just a fluke and not representative of where our state’s economy finds itself. Remember the cardinal rule of economy watching: Never place too much weight on an indicator value for a single time period. I would love that. But remember, this is March data, the month prior to the tariff war,” said Lardaro. “Any hopes of our getting a boost from April’s national economic activity are almost certainly going to be dashed, especially since the trade war is being waged against goods imports, and Rhode Island’s manufacturing sector had already been showing signs of weakness prior to the tariff war, notably a trend of a declining Manufacturing Wage, a rarity to say the least, and declines in both manufacturing employment and the workweek. Remember, this is the most cyclically sensitive part of Rhode Island’s economy.

 

 

Labor Numbers

Lardaro also cites that "Rhode Island’s Labor Force fell in March relative to a year ago, as did both the participation rate and the employment rate. That is so negative that I have resumed publishing the Participation-Adjusted Unemployment Rate, which, contrary to the 'official' jobless rate of 4.8 percent, was 6.1 percent in March! Of note: Our Employment Rate has now fallen on a yearly basis for every month since last June, and resident employment has been flat or declining for three consecutive months."