Rhode Island’s economic outlook in May is similar to that
from April: the current tepid recovery is continuing, although signs of a loss
of momentum have become more readily apparent. The good news is that Rhode
Island is still in the recovery that began in February of 2010, which as of May
reached its 27th month. The concerning news is that like the US, our rate of
improvement has slowed.
In discussing this, I am not referring to the questionable
“official” labor market data currently being released by the DLT. According to
those figures, payroll employment here has now either declined or remained
unchanged on a year-over-year basis for ten consecutive months. I challenge
anyone who chooses to believe those numbers to reach any conclusion other than
that Rhode Island has already entered a double-dip recession. In fact, even the
DLT has admitted publicly that a number of those published year-over-year
employment declines never occurred — they will be eliminated when the data are
revised in coming months.
Fortunately, if we focus on more accurate data and the
Current Conditions Index, which is a broadly based index, it is clear that some
of the momentum we witnessed as 2011 ended and we moved into 2012 has begun to
fade. While the pace of economic activity here isn’t all that great, my
econometric models show that payroll employment has slowed to an annual growth
rate of around 0.3 percent. The Current Conditions Index for May, based on the
“official” data, shows a reading of 58, once again in the expansion range. The other
displayed value, 67, is the likely value when the “official” data are
eventually revised. Based on those alternate values, the CCI has now moved from values
around 75 down to 67. As I have noted for several months now, it is the persistence of these
expansion range CCI values that matters the most for now.
The remainder of this report and the complete version, which includes the indicator performance table and the report in PDF format, can be found on my web site: http://www.llardaro.com .
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