Rhode Island news
Recession report: R.I. jobless rate soars to 7.2%, the highest rate in 14 years
06:54 AM EDT on Friday, June 20, 2008
Rhode Island’s ailing job market suffered another blow last month, as payroll jobs plunged by 1,800 and the unemployment rate soared to 7.2 percent — the highest in 14 years, a government jobs report released today shows.
The report offers more evidence, economists say, that Rhode Island is facing the worst recession since the 1990s.
The ranks of the unemployed last month swelled by 6,200 — the single biggest one-month increase in more than 30 years, according to the Rhode Island Department of Labor and Training.
Meanwhile, Massachusetts yesterday reported payroll jobs last month grew by 3,900 but the unemployment rate rose to 4.9 percent. In Connecticut, jobs were up by 2,900 and the unemployment rate was 5.4 percent.
The national unemployment rate in May was 5.5 percent.
Rhode Island’s lack of any strong engine of job growth, coupled with fallout from the housing market and the state’s budget crisis mean that the state has “three major problems where most states only have one,” the housing market, said Andres Carbacho-Burgos, an economist at Moody’s Economy.com.
“It’s going to come a little close to what the state was like in the early 1990s,” he said.
So far this year, Rhode Island has lost 7,900 payroll jobs and the number of residents who reported actively seeking work but unable to find any rose to 41,100, the most since July 1993, the state labor report said.
Back then, the state unemployment rate peaked in March 1992 at 9 percent, and remained just below that until the winter, when it edged down to the mid 8-percent range, according to state data. The unemployment rate continued to decline until June 2000, when it fell to 4.1 percent — and then began to climb.
Last month’s unemployment rate jumped 1.1 percentage points to 7.2 percent, the highest since January of 1994.
Two key economic indicators — average wages and retail sales — fell in Rhode Island during the first quarter of this year.
The state’s average wage growth slowed over the past year and then fell about 0.5 percent during the first quarter of this year, to between $38,000 and $39,000, according to data from Economy.com.
Retail sales also fell during the first quarter to about $14.7 billion, down from $15.2 billion during the fourth quarter of last year, according to Economy.com.
Rhode Island is one of 11 states in the country and the only New England state that economists with the nonprofit New England Economic Partnership said last month had fallen into recession.
Last month’s l,800-job loss included 600 positions in retail trade, due to cuts in department stores and drug stores, the state report said. Transportation and utilities jobs fell (-300), as did employment in accommodation and food services (-300) and manufacturing (-300). Smaller employment declines also were reported in arts, entertainment and recreation, wholesale trade, professional and business services, education and government.
Even health-care services, which economists often say is “recession proof,” recorded only a 100-job gain.
The education and health services sector accounts for about 21 percent of Rhode Island’s payroll jobs, according to data from the federal Bureau of Labor Statistics.
The number of employed Rhode Island residents last month declined by 8,000, to 530,400 — a decline of 18,700 since May of last year, the state reported.
The average hourly manufacturing wage last month rose one cent, to $13.93 per hour, and was up 18 cents from May of last year.
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