The Ocean State’s unemployment rate continues to hover above the national average.
The seasonally adjusted unemployment rate rose 0.3 of a percentage point to 5.2 percent in October. A year ago, Rhode Island’s unemployment rate was 5.1 percent. The national unemployment rate for October held steady at 4.6 percent.
In October, there were an estimated 475,700 Rhode Islanders working at jobs either in Rhode Island or out of state. This figure is down 2,300 from September’s level. Compared to last year, the number of working Rhode Islanders has declined by 5,900.
The number of unemployed Rhode Island residents increased by 1,500 over the month to 26,100 in October.
Lee H. Arnold, director of the Rhode Island Department of Labor and Training, released the latest figures. Arnold said the statistics indicate a slowing of economic activity.
“The trend in the labor force figures over the past several months indicates that the pace of economic activity in Rhode Island may be slowing,” said Arnold. “We are hopeful that the holiday season will provide additional employment opportunities for Rhode Island workers.”
But while holiday jobs may help in the short-term, the big picture view of the Rhode Island economy is beginning to look a bit fuzzy. Leonard Lardaro, an economics professor at the University of Rhode Island, said that while the rise in unemployment is not a reason to panic, it is a signal of darker days ahead for the Rhode Island economy.
“We hit 4.1 percent several months ago, but since then unemployment has been going up,” said Lardaro. “It’s very clear that Rhode Island’s economy is growing more slowly.”
That’s not a cause for alarm, but Lardaro points out that some of the state’s major construction projects — such as Fidelity Investments and Providence Place — have already added jobs to the economy and so the impact of those jobs is factored into recent employment statistics.
“If it weren’t for those projects we would either be stagnant or declining,” Lardaro said.
Though there has been a slide in recent months, from a yearly perspective, the number of jobs in Rhode Island has increased by 0.5 percent. Contract construction surpassed all industries with the addition of 2,200 jobs. The bulk of the employment growth was in special trades construction. Finance/insurance/real estate gained 1,400 jobs, bolstered by hiring at Fidelity Investments, which opened in the spring. Services, led by an increase in business services (up 1,000), posted a net gain of 800 jobs.
Trade and government reported annual declines of 600 and 300 jobs, respectively. Within the trade industry, miscellaneous retail trade accounted for the largest employment decline. The manufacturing sector registered a yearly decline of 1,200 jobs with the largest loss in jewelry-silverware, with 800 fewer jobs.
John Swen, director of the Rhode Island Economic Development Corporation, puts the recent employment numbers in perspective.
“Historically, by any measure, this is extremely low unemployment,” Swen said. “So I don’t think it is something that we should become obsessed with. At the same time, most prognosticators are predicting a slowing of growth — and I don’t think they are wrong.”
As long as Rhode Island’s fortunes are tied to the national economy, according to Lardaro, there is reason for concern. For too long we have been guilty, he said, of assuming that positive national trends will go on forever.
“As long as the national economy grows at four to five percent, we’re fine,” said Lardaro. “But unfortunately, that’s not going to happen over the long term. And once the national economy slows, we slow right away and more dramatically.”
Each month, Lardaro publishes a Current Conditions Index, a measurement of the health of the state’s economy. Back in April, the measurement rose to a 92, an indication of a strong economy, Lardaro said. But recent measurements have been much lower, with the latest at about 67, Lardaro said.
For business owners, it’s no time to panic. But it is time to reflect and perhaps, fine-tune.
“Make sure your niche is well defined,” Lardaro said. “What drives business is the demand for your product.”