This is an abbreviated report of the Current Conditions Index for March of 2012. If you are interested in reading the entire report with tables and The Bottom Line, please go to my web page: http://www.llardaro.com .
In my report last month, I noted that
based on the existing labor market data being released by the RI Department of
Labor and Training, “ … it is no longer clear whether the Rhode Island is still
in a recovery or whether it has moved into the earliest stages of a dreaded
double-dip recession. Payroll employment has now declined for seven
consecutive months on a year-over-year basis … For many, this alone
would be a sufficient basis upon which to make the recession call.”
After my report was released, I was
informed by the RI DLT that the current labor market data has been understating
job change, and that employment has been rising for some time now. So, remember
all the data they were and are still publishing and the conclusions anyone
serious about analyzing our state’s economy would arrive at based on them? To
quote Emily Litella of Saturday Night Live fame: “Never Mind.”
So, in an odd and circuitous way, my
overall conclusion last month that Rhode Island has not entered nor is about to
enter into a recession proved to be correct. And, in spite of what the data
published by the DLT now say, our state’s March Unemployment Rate is not
11.1 percent, but somewhat lower, likely in the 10-11 percent range.
All of this requires that I adapt CCI
values. Since existing labor market data are very likely understating
two CCI indicators, Private Service Producing Employment and Employment
Service Jobs, I will now be providing two CCI estimates each month
until the data flaws disappear (hopefully) next February.
Rhode Island ended the first quarter of
2012 on a positive note, as a re-acceleration from the mid-2011 doldrums
materialized. While Current Conditions Index values based on the faulty
existing labor market data continued to show readings barely above stall speed
(the top values), allowing for likely data revisions, the CCI beat or tied its
year-earlier values for every month in the first quarter (the lower values). As
of March, Rhode Island’s current recovery reached its 25th month.
On a year-over-year basis, four of the
five non-survey-based CCI indicators improved. All five showed improvement on a
monthly basis. Retail Sales increased by 4.4 percent, its seventh
consecutive improvement compared to year-earlier values. While part of this is
no doubt related to the skilled Rhode Islanders we rent out to neighboring
states who bring their income home with them, Retail Sales momentum
clearly does have “legs” at present. Along with this, US Consumer Sentiment
rose as well, by 13 percent. Both of these indicators had March values that
exceeded their February levels. New home construction, based on Single-Unit
Permits, continued its roller coaster ride, falling by 14 percent in March
relative to last year. But it too managed to improve relative to February. New
Claims for Unemployment Insurance, a leading labor market indicator that
reflects layoffs, declined by 7.1 percent, its fourth improvement in the last
five months. It too showed strength relative to February. Finally, Benefit
Exhaustions, reflective of longer-term unemployment, also fell, at a
double-digit rate.
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