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BACKGROUND

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:

  • Government Employment
  • Employment Services Jobs*
  • Retail Sales
  • University of Michigan US Consumer Sentiment Index**
  • Single-Unit Housing Permits
  • Private Service-Producing Employment***
  • Manufacturing Man-hours****
  • Average Hourly Manufacturing Wage
  • Seasonally Adjusted Unemployment Rate
  • Resident Labor Force
  • New Initial Claims for Unemployment Insurance
  • Unemployment Insurance Regular Benefit Exhaustions

The CCI ranges from 0, when no indicators improve compared to year-earlier levels, to 100, when all twelve show improvement. Values above 50, the "neutral" value, indicate that the Rhode Island economy is expanding, while values below 50 are indicative of contraction. Prior to "The Great Recession" that began in June of 2007, the CCI had never attained a value of 0, indicating that no indicators improved relative to year-earlier values. This changed in 2008, when the CCI fell to 0 on three occasions, and in 2009, when another value of 0 was recorded. Prior to this, the low for the CCI had been 8, which occurred for only a single month on several occasions. For almost all of 2008, the CCI recorded values of 8. The CCI attained its maximum value of 100 on several occasions, for almost all of 1984 and once in 1986. Note that these values occurred exclusively when Rhode Island was still a manufacturing-based economy.

*
Up until February 2006, the CCI used Help Wanted Advertising for Providence, RI as one of its indicators (and toward the end of its use an econometric adjustment was required). This indicator replaces Help Wanted Advertising.
** Prior to the October 2001 report, the CCI used Existing Home Sales in Rhode Island. This indicator replaces Existing Home Sales. 
*** Prior to the January 2003 report, Miscellaneous Service Employment, a major category of the SIC codes, was used. Now that NAICS replaces the SIC codes, the current indicator was chosen to replace Miscellaneous Service Employment.
****Beginning with the November 2005 report, Manufacturing Man-hours will be referred to as Total Manufacturing Hours.

 


THE CCI THIS MONTH
MONTHLY HIGHLIGHTS:

NOVEMBER 2022: 67

 

 

 

Rhode Island’s economy continued to slow in November, but unlike last month, there were even more signs of a slowing. While the Current Conditions Index was 67 in November, with eight of twelve indicators improving, rates of growth in several indicators continued to slow and in what bodes badly for the coming months, all four of the CCI indicators that failed to improve in November were leading economic indicators. All of this calls into question how rapid the pace of economic growth will be through the end of 2022 and into 2023. This conclusion was further enhanced by the performance of the Monthly CCI (see bottom right). This alternative way of viewing Rhode Island’s economic momentum has been signaling potential problems since April of this year. For November, the Monthly CCI fell all the way to 17, as only two of the twelve indicators improved relative to October.

 

November’s data, and to some extent that for October, appear to be signaling weakness in the coming months. In November, New Claims for Unemployment Insurance, a leading indicator of layoffs and the best measure we have of layoffs in this state, rose sharply for the first time since the height of the pandemic, even with a very easy comp. Retail Sales, the star performer of the twelve CCI indicators, has been slowing noticeably since August, posting very slow growth in November. Single-Unit Permits, which reflect new home construction, have dramatically weakened, resuming the downtrend that began in December of last year. Employment Service Jobs, a leading indicator of employment, has also fallen now for two consecutive months while US Consumer Sentiment also remained weak this month.

 

The reason I am so concerned about the behavior of these indicators is that none of the first three are survey based, although Employment Service Jobs is survey based, so it might be revised when the rebenchmarked data appear soon. In addition to this, for November, both the Employment Rate (percent of the resident population that is employed) and the Labor Force Participation Rate (percent of the population in the Labor Force) both declined as well. As for the latter, this caused the participation-adjusted Unemployment Rate to rise from 4.5 percent all the way to 4.9 percent versus the naïve (official) rate which also rose, but to 3.6 percent. So, the question now is whether Rhode Island’s performance in August and September (when the CCI was 92) was a fluke or whether and when we return to those levels. In the context of a slowing national economy, the answer to this question might not be that difficult to ascertain. At least we can still say that November was the seventeenth consecutive month for which Rhode Island’s economy expanded (the CCI was above 50). And, it shouldn’t be lost on all of this that Rhode Island’s manufacturing sector hung in there during November, as Total Manufacturing Hours rose again (+4.6%) and the Manufacturing Wage increased by 4.5 percent.

 

For the other CCI indicators, Government Employment rose as it has for every month since April of last year (+1.6%), Private Service-Producing Employment also increased (+1.9%) but showed a slowing rate of improvement, and Benefit Exhaustions, which reflect long-term unemployment, continued to drop sharply (-50.6%).

 

The performance of the Monthly CCI Indicator slipped sharply in November, all the way to 17, providing further evidence of continuing weakness in annual changes. Future calls, however, are made more difficult by the fact that October and November employment numbers will likely be changed with rebenchmarking. So, it remains too premature to make any calls that Rhode Island is witnessing the first stage of LO (Last Out). Our saving grace might prove to be the large unspent federal funds our state received. When spent these should boost our rate of growth through much of 2023. 

 

 

 

The reason I am so concerned about the behavior of these indicators is that none ours rose again (+4.6%) and the Manufacturing Wage in

 

 

 

 

  

Monthly CCI Values (red = recession)
(Note: These are revised values. Original reports sometimes specify different CCI values, based on originally released data.

Jan   Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1983 42   58 58 67 75 83 83 75 83 83 83 92
1984 100   92 100 100 100 100 100 92 100 92 92 83
1985 67   75 75 75 67 75 67 50 50 58 83 67
1986 75   83 100 92 92 83 92 92 92 92 92 67
1987 67   67 58 58 67 75 75 75 75 67 75 75
1988 83   83 75 67 67 67 58 50 67 58 50 58
1989 67   50 50 33 58 33 25 25 25 33 33 33
1990 25   25 25 25 17 17 17 17 33 17 25 25
1991 25   17 17 8 25 17 25 25 25 33 17 17
1992 42   42 58 75 75 83 75 67 67 83 83 92
1993 75   83 67 67 83 67 75 75 75 58 42 58
1994 58   67 67 58 58 75 67 67 67 67 83 75
1995 58   58 58 67 50 42 42 42 58 33 67 42
1996 50   42 75 75 67 75 75 67 75 92 83 92
1997 100   92 83 75 67 75 75 75 83 75 92 83
1998 83   75 75 75 75

75

75 67 58 75

75

50

1999 83   75 75 83 67 83 75 75 92 75 83 58
2000 83   83 83 67 42 50 58 50 58 67 67 67
2001 42 33 25 17 33 50 25 33 33 42 33 42
2002 58   75 67 58 42 33 50 50 58 67 67 50
2003 50   50 50 58 58 58 83 67 83 75 92 67
2004 67   67 58 67 58 58 67 67 67 58 50 67
2005 50   67 50 50 42 75 58 67 42 58 58 67
2006 58   58 67 58 33 50 33 58 75 83 58 67
2007 50   50 33 33 58 50 33 33 17 17 8 25
2008 8 8 8 17 8 0 8 0 8 0 8 8
2009 17 8 0 8 17 33 17 42 33 42 50 33
2010 42   58 67 67 75 75 83 83 67 67 75 83
2011 50 67 67 58 50 58 58 42 50 50 58 50
2012 58   50 58/75 50/75 58/67 67/75 50/58 67/75 50/58 75/83 75/83 92
2013 75   67 83 67 83 75 75 67

75

75 67 75
2014 67   67 58 58 67 50 67 67 75 67 58 67
2015 58   58 67 58 67 75 75 92 83 67 75 58
2016 58   67 50 42 50 42 67 75 75 50 58 75
2017 75   83 92 83 83 83 83 83 75 83 92 83
2018 75   92 75 67 92 83 75 67 67 42 83 58
2019 75   33 58 58 58 75 83 67 50 75 58 83
2020 75   75 33 8 8 25 25 25 25 17 25 25
2021 25   17 42 75 92 83 100 75 83 83 83 92
2022 75   75 75 67 67 67 75 92 92 75 67  

You can download monthly reports in PDF format starting
with January 1999 by clicking on the monthly index value.
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Historical Annual CCI Values

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
42
54
33
74
96
67
88
69
65
39
1990
1991
1992
1993
1994
1995
1996
1997
1998

1999

22
21
70
69
67
51
72
81
72
77
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
65
39
56
66
63
57
54
40
7
24
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
70 55 74 75 63 64 56 85 79 61
2020 2021                
26 65                

 

CCI History

Copyright © 2014 Leonard Lardaro, Ph.D. All rights reserved.

 

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