Rhode Island’s jobless rate fell from 11.8% in August to 11.5% in September. Sounds good, right? In some ways, it is – the number of Rhode Islanders with a job either in-state or out-of-state rose by 600 last month, the first increase since May.
But the bigger reason for the decline in the jobless rate was more depressing: 1,100 Rhode Islanders dropped out of the labor force altogether last month, nearly twice as many as found employment.
I’ve been writing about the issue of Rhode Island’s missing workers for a couple months now, and it’s not going away. From April 2009 to April 2010, nearly 17,000 Rhode Islanders flooded back into the job market – a sign of growing optimism among workers. But the trend shifted into reverse in May, and 8,300 workers have left the labor force over the last five months. You can see what’s happened in this chart:
We don’t know where those people went – they could have moved out of state, gone back to school, or just given up on finding employment – but it’s not a sign of a particularly healthy economy.
On top of that, a separate survey showed that the number of jobs in the state continues to go down, dropping by 1,000 between August and September as bars, builders and other employers got rid of workers. Worse, all of September’s job losses were in the private sector – the government actually hired 500 people after months of public-sector layoffs.
The total number of jobs on Rhode Island employers’ payrolls last month – 450,900 – was still 9.2% below the state’s peak employment level of 496,500 back in February 2007. Or to recycle the analogy I used earlier this week, the number of jobs in the state last month was about the same as in May 1987, almost a quarter-century ago. No wonder our WPRI poll last month found only 15% of Rhode Islanders think the state is on the right track.
The contrast with Massachusetts is striking. The Bay State’s jobless rate fell from 8.8% in August to 8.4% in September – the biggest one-month drop in 34 years of record-keeping. Though the Bay State’s total payrolls shrank too, its labor force grew by 1,900 and the number of employed Massachusetts residents increased by 13,900.
Update: Bloomberg notes that the weakness of the job market in Rhode Island and nationwide stands in stark contrast to the robust corporate earnings being reported this month by companies like Boeing and Intel. Will business investment sustain the recovery, and will it ever translate into strong job growth?