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Rhode Island ended the second quarter on a rather mixed
note. While the “official” labor market data continue to depict an economy that
is not only falling off the proverbial “cliff,” but that has entered into a
double-dip recession, a news release from the Governor’s office, based on
analysis from the Department of Labor and Training, stated that employment here
is not actually falling, as the DLT monthly data continue to show, but has
actually been increasing for some time now (the release covered the first
quarter of 2012). Apparently, this came as a big surprise to much of this
state’s media, even though the errors with the “official” labor market data
were publicly acknowledged by the DLT months ago and I have been discussing
all of this regularly in my Current Conditions Index reports. Recall, this data
divergence caused me to begin providing two CCI values each month — one based
on the “official” data and the other using my simulated labor market
values.
What do we actually know overall about Rhode Island’s
current economic performance? Rhode Island’s economy continues to be in a tepid
recovery that began in February of 2010, now 28 months old. While economic
reality here is far better than what the “official” data show, the non-flawed
data indicate that this recovery displayed some loss of momentum during the
second quarter that will likely continue moving forward. It is important to
note, however, that even using the flawed “official” labor market data, the
Current Conditions Index never gave a recession signal. Furthermore, based on
my simulations (the other CCI values listed), Rhode Island’s economy has been
able to sustain some of the momentum it gained during the second half of 2011,
although this that momentum bas begun to erode based on the performances of
several key individual indicators.
According to my econometric models, there were three
noteworthy but problematic indicator changes in June. First, payroll
employment, which has been rising for some time now on a yearly basis (albeit at
declining rates) actually declined. Second, this employment weakness translated
into an uptick in Rhode Island’s monthly Unemployment Rate from my
projection of a 10.7 percent rate in May to 10.8 percent in June. Finally, the
rate of growth in a very important labor market indicator, Private
Service-Producing Employment, has slowed dramatically over the past two
months, barely increasing in June.
See the full report at: http://www.llardaro.com .
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