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There has been a well-defined downward trend in Rhode Island’s economic momentum that has existed since the late summer of 2022, leading to continued economic weakness in July, said University of Rhode Island economist Leonard Lardaro.
Lardaro’s Current Conditions Index, which reflects cyclical economic momentum, has registered in either contraction or neutral territory for all but one month since December of last year. July’s CCI was 33, with only four of twelve indicators–U.S. Consumer Sentiment, Manufacturing Wage, Government Employment, Retail Sales and Unemployment Rate–showing improvement.
Lardaro continues to believe the Rhode Island is in a “statistical recession” and that things look much different from what might normally exist if the state were in a typical recession, largely the result of massive amounts of monetary and fiscal stimulus, state budget surpluses related to national fiscal policy largesse, pandemic period savings, capital gains from home equity and the stock market and several other effects, some related to the Russia-Ukraine war.
At the same time that some variables show weakness in the aggregate, elements within those same variables remain fairly strong.
While higher income individuals have continued to do very well, he notes things are quite different for middle-income Rhode Islanders and those at the other end of the spectrum.
Lardaro’s Current Conditions Index – through July 2023:
URI Professor of Economics Leonard Lardaro, is the creator and author of the Current Conditions Index.
Additional information and historical data available online: http://www.llardaro.com/current.htm.
The Current Conditions Index, created by Lardaro, measures the strength of the present economic climate in Rhode Island by following the behavior of 12 indicators.
Rhode Island has a legislature that shows a multimillion dollar surplus built into the budget BEFORE it is even adopted and signed into law. The legislators would argue they are prudent managers of our tax dollars when all the data says they are not. In this ‘go along to get along’ climate that permeates the RI Legislature, just the few ‘legislative leaders’ decide how billions of our taxes will be spent and everyone else is expected to follow suit. Divergence from the House Speaker’s agenda or that of the Senate President is, and has been for years, political suicide. It’s how we end up with 38 Studios type issues, McCoy stadium issues, and literally hundreds if not thousands of other issues that should never happen. Our roads are better than gravel paths but not that much better, our schools are not maintained and we are constantly seeing bond issues to finance everything from A to Z. Millions upon millions of dollars every year a devoted to paying interest on borrowed money. It would be interesting to see the costs of the new initiatives the legislature enacted, this year alone, printed in our local newspapers, and how our tax dollars are being spent. We forget, these NEW INITIATIVES, are only new once, then they become a fixture for years and years to come. We need legislators to do their job and never be just ‘rubber stamps’ to the leadership on Smith Street.
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