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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:

DECEMBER 2020: 25

 

 

Rhode Island’s economic performance at the end of 2020 was largely the same as it has been throughout the pandemic: Severe contraction compared to a year ago, sprinkled with a few glimmers of light for the most recent few months. Was this year’s performance merely a reflection of what is happening nationally or is there something else at work? While we, like everyone else, were literally dragged into shutting large parts of our state’s economy down, where we find ourselves now must also be judged relative to how well our state’s economy was performing prior to the pandemic.

As I have noted countless times over the last couple of years, Rhode Island’s economy has remained largely stuck at its 2016 level (based on real GDP). Resident employment, even before the pandemic hit, remained below its level of December 2006 - more than a decade earlier! The statistical deceivers in our state hid behind an extremely low jobless rate, but that was a byproduct of mediocre growth in resident employment coupled with a decade long decline in our state’s Labor Force. And, while Rhode Island’s economy is clearly FILO, we were spared the FI portion this time (as everyone fell sharply at the same time), but since our elected officials (not to be confused with leaders) have effectively wasted this crisis, as they did in 2008, we have failed to reinvent ourselves to make our state’s economy more competitive and linked to national growth than it has been in a while. In other words, the LO remains. None of our elected officials have yet to define specifically what Rhode Island’s economic niche is and how to energize and possibly redefine our engines of growth. This would certainly be an opportune time to do so, as our state continues to rank at or near the bottom for all business climate surveys. Perhaps there should be a new show that replaces Hawaii Five-0: Rhode Island 50. In the future, we must reinvent our state’s economy and business climate. Sadly, this state is run exactly the same it has been for forty years, even though the economic world has changed. For this reason, I continue to believe it will take three to five years for Rhode Island to return to where it was pre-pandemic, and that wasn’t all that great!

  Feb-20 Dec-20 Chg % Chg  
Government Employment 66.0 62.5 -3.5 -5.3  
Consumer Sentiment 100.6 78.5 -22.1 -22.0
Single-Unit Permits 1127.2 1180.3 53.1 4.7 Y
Retail Sales 17.7 18.4 0.6 3.6 Y
Employment Service Jobs 9.3 7.5 -1.8 -19.3
Priv Serv Producing Jobs 446.9 399.8 -47.1 -10.5
Manufacturing Employment 39.4 38.8 -0.6 -1.5
Manufacturing Hours 37.5 37.4 -0.1 -0.3
Manufacturing Wage 19.6 21.1 1.5 7.7 Y
Labor Force 558.5 542.4 -16.1 -2.9
New Claims for UI 26.5 190.8 164.3 621.2
Benefit Exhaustions 6.7 31.1 24.4 364.5
Unemployment Rate 3.4 8.1 4.7 138.2
Payroll Employment 508.4 461.9 -46.5 -9.1
Resident Employment 539.8 498.4 -41.4 -7.7

This month, I am doing something a bit different. The table above is not for year-over-year comparisons of the CCI indicators, but a contrast of February with December of 2020. The depth of the decline in our state’s economy is shocking. Only three CCI indicators have improved relative to February, the same three that have done so for months now. Look at employment (bottom): Both measures have decline by over 40,000 since February! It seems we don’t do terribly well in good times, but manage to fall precipitously when things get bad, same as 2008.

There might be some good news on the horizon. First, we will soon get the revised lab
CCI Indicators - Monthly% Change
Government Employment -2.0  
US Consumer Sentiment 2.2 Y
Single-Unit Permits 12.6 Y
Retail Sales 0.1 Y
Employment Services Jobs -7.0  
Priv. Serv-Prod Employment -1.6  
Total Manufacturing Hours 1.1 Y
Manufacturing Wage -0.7  
Labor Force 0.1 Y
Benefit Exhaustions -33.7 Y
New Claims -7.8 Y
Unemployment Rate (change) 0.8  
Y = Improved Value
oron value, for the fourth time in the last five months. So maybe we are in or m

There might be some good news on the horizon. First, we will soon get the revised labor market data for 2020. It might (key word) show that the declines were not as bad as what we are seeing now. Second, the monthly based CCI again reached 58, an expansion value, for the fourth time in the last five months. So maybe we are in or moving towards the early stages of crawling out of the depth of our declines. If so, where are we headed? More slow and lagging growth with our elected officials continuing to hide behind misleading statistics, telling us always to focus on the positive. That’s not leadership, it’s denial, a major reason why our economy has continued to do so badly. Let me summarize this state of affairs with two words: Endogenous Mediocrity: Rhode Island’s economic mediocrity is a logical and predictable outcome of the way things are and are not done here.

ving towards the early stages of crawling out of the depth of our declines. If so, where are we headed? More slow and lagging growth with our elected officials cochangeAugust, reaching an expansion val

 

 

 

 

  

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

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

 

Historical CCI Values

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

 

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