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The Current Conditions Index (CCI) is a monthly indicator that details the present state of the Rhode Island economy by following the behavior of twelve key economic indicators pertaining to housing, retail sales, fiscal pressures, the employment situation, and labor supply:
The CCI ranges
from 0, when no indicators improve compared to year-earlier levels, to
100, when all twelve show improvement. Values above 50 indicate that the
Rhode Island economy is expanding, while values below 50 are indicative
of contraction. The CCI attained its low value of 8 in April, 1991, as
the combined effects of a recession, a banking crisis, and major defense
cutbacks all took their toll on the Rhode Island economy. It has
attained its maximum value of 100 on several occasions during 1984 and
1986. |
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As has been the case for a while now, some of this can be attributed to weak “comps” from a year ago. That is a fairly typical occurrence when an economy moves toward the end of a recession and as it progresses through the early stages of recovery. For the time being at least, Rhode Island’s economy remains in recession. But as the CCI values since May indicate, we are continuing to move in the direction of an eventual recovery, hopefully in the first quarter of next year. Focusing on September’s improving indicators, US Consumer Sentiment, our “star” performer of late, rose by 4 percent, its sixth consecutive year-over-year improvement. Our Labor Force continued its recent growth, rising by another 0.5 percent compared to a year ago on top of prior annualized rates in excess of 6 percent. Growth in the Manufacturing Wage accelerated in September, rising to 2.3 percent compared to a year ago, moving the wage above $14 per hour for the fourth consecutive month. Finally, New Claims, which reflect layoffs, continued to improve, falling by 13.4 percent compared to last September. More importantly, this leading indicator has leveled off in recent months.
While there are clearly positive elements in this month’s report, namely the CCI’s overall value and the number of monthly improving indicators, the negatives associated with discouraging performances relative to a year ago remain. Retail Sales fell by another 8.4 percent in September, the latest in a string of consecutive declines that extends all the way back to April of 2008. Future job prospects based on Employment Service Jobs, another leading indicator, remained discouraging, as these dropped 15.7 percent compared to a year ago. This indicator appears to have stabilized on a monthly basis, however. Total Manufacturing Hours registered yet another double-digit decline, falling by 14 percent in September, as employment fell and the workweek shrank by almost 1.4 hours. This continues a divergence from the national trend of a possible manufacturing-sector bottom. Along with this, the rate of decline in Private Service-Producing Employment accelerated in September to 3.5 percent. Single-Unit Permits fell by 9.8 percent in September, as new home construction here remains virtually non-existent. Government Employment, driven largely by budget woes, fell by 1.3 percent in September, a slightly improved rate of decline. Benefit Exhaustions, which reflects long-term unemployment, surged once again in September, rising by almost 61 percent compared to a year ago. Finally, our Unemployment Rate rose to 13 percent in September, preserving our national ranking of #3 (behind Michigan and Nevada).
You can download monthly reports
in PDF format starting
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Historical Annual CCI Values
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Copyright © 2008,2009 Leonard Lardaro, Ph.D. All rights reserved.
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