Saturday, March 23, 2013

Current Conditions Index: January 2013

Below is an abbreviated version of the January 2013 Current Conditions Index report. The full report (in PDF format) along with tables and historical reports is available on my web site: 
The long-awaited revisions to Rhode Island’s labor market data have finally arrived. While I have been anticipating these for quite some time now, it appears that most people in the state remained unaware of what was actually happening until very recently. According to the previous official data, Rhode Island was doing very badly. At one point, it wasn't all that difficult to conclude that we had actually entered into a double-dip recession. Throughout all of this, I kept chugging along each month with reports indicating that contrary to the “official” data, our state’s economy was performing fairly well in terms of its overall momentum and the breadth of activity here.
The new data confirm my prior analysis. Not only has Rhode Island's economy been improving for some time now, the pace of activity here actually accelerated during the third and fourth quarters of 2012. A quick examination of the chart for the Current Conditions Index (below, right) shows this very clearly. The good news for me is that I can now stop providing two CCI numbers each month. As of January, Rhode Island’s recovery was 35 months old.
According to CCI revisions for 2012, values revised higher for ten of the months, one was unchanged, and December was revised down slightly. What a difference! For all of 2012, the CCI registered values of 83 or greater five times, with two of those equal to 92.
So, after strong third and fourth quarters in 2012, Rhode Island began 2013 on yet another positive note as the Current Conditions Index registered a value of 75, with nine of 12 indicators improving. Among the indicators that improved were several very strong, favorable trends. Not the least of these pertains to Retail Sales. Its year-over-year growth has matched or exceeded six percent for three of the past four months. Along with this, our state's Labor Force appears to have finally begun to rise again, starting in last August. That upward trend makes the improvements in our state's Unemployment Rate more significant. Two changes I had anticipated were confirmed. Private Service-Producing Employment has actually been rising for quite a while, as was true for Employment Service Jobs. Finally, the revised CCI values show that Rhode Island was not stuck in a saw tooth pattern through the middle of 2012. Instead, there was consistent momentum throughout all of last year with an acceleration during the second half of the year during which it is safe to conclude that Rhode Island’s economy shifted into a higher gear.
Three indicators failed to improve in January. Government Employment, which reflects the effects of ongoing fiscal consolidation, hasn’t improved since August of 2010. It might be in the process of bottoming, assuming that our recent momentum is sustained, as it has fluctuated around 60,000 for several months now. US Consumer Sentiment also failed to improve, but January’s decline was its first in almost a year. Recent stock market momentum bodes well for this indicator. Lastly, Single-Unit Permits fell in January, but its “comp” from a year ago was almost impossible to beat due to the weather last January. The apparent bottoming of housing here should help prevent this indicator from moving into a downtrend in the coming months.
See the full report (with tables) at: .

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