Time will tell whether I’m wrong, but I’m not sure the warning in Patrick Anderson’s Providence Journal article about RI employment last week was sufficiently vehement:
A sudden plunge in the number of Rhode Island-based jobs over the winter has caused fiscal analysts to darken their outlook for the state’s economy in the coming year, but they are not expecting a major downturn.
In March, state and federal officials decided they had overcounted the number of jobs in the state at the end of last year by 7,300 positions. Then, in the first three months of this year, Rhode Island shed another 2,800 jobs, putting it 10,100 jobs shy of the record employment high water mark celebrated last December.
Economists and state labor officials are a little puzzled by the job losses.
Regarding the drop in the first quarter, one quoted economist, Michael Lynch, notes that the sector leading the losses was “administrative support/waste management services,” which includes “office administration, hiring and placing of personnel, document preparation and similar clerical services, solicitation, collection, security and surveillance services, cleaning, and waste disposal services.” Inasmuch as the losses come in a single sector and there have been no massive layoffs to explain the drop, Lynch ascribes the trend to “noise in the data.”
We’ll see. Another possibility is that, despite the national growth, Rhode Island’s economy isn’t supporting a particular sector, for some reason. In this case, that sector is the one that operates offices and helps companies grow. If it is unique in having lost jobs, it may be that Rhode Island is uniquely a bad location from which to operate a business and capitalize on broad growth.
Democrat Governor Gina Raimondo’s dismissive response that “those adjustments are pretty typical of what happens at the end of every year” is alarming in its own right. The revisions to employment data each year reflect the fact that the state’s economy is doing something that economists didn’t expect. If the economy had truly been as strong as Raimondo claimed while campaigning for reelection, the revision would have been up. Instead, economists are surprised and mystified by how poorly our state is doing under her leadership.
They shouldn’t be.