January 2016 Employment: New Year, Still Stuck


In recent years, the pattern has been clear:  For the first half of the year or so, Rhode Island’s employment appears to boom (inexplicably), with a decrease for the remainder of the year and a revision the following January that makes thousands of employed residents disappear but smooths out a long-term improvement.  This year’s revision was different, in that employment in Rhode Island has been completely stagnant since early last summer, and the January numbers show no bump.

After the revision, which notched Rhode Island’s unemployment rate up a few tenths of a percentage point, according to the Bureau of Labor Statistics (BLS), the unemployment rate resumed its one-decimal-point declines again in January. Also resuming, however, was the suspicious reason for that result.  Employment increased by only 194, but once again, the labor force shed hundreds of Rhode Islanders.  In January, 436 Rhode Islanders stopped looking for work, which had the perverse effect of improving the unemployment rate.

So, the “good news” is that, while few additional people are finding work, even fewer are looking for it.  If labor force were the measure of an economy, Rhode Island would have to admit that the recession never ended.


In recent months, anyway, Massachusetts and Connecticut have seen very different trends, with labor force holding up better than employment.  Even though that trend would tend to drive the unemployment rate up (a bad thing), it can actually be a positive development, because it might mean that people sense that opportunity is returning.


One telling milestone that Rhode Island’s poor performance has brought about can be seen in the chart of every state’s current percentage of its pre-recession peak employment.  With the revision and the January results, Rhode Island has once again entered the bottom 3 by this measure and, more notably, has fallen below Michigan.

Rhode Island and Michigan were long the outliers by this measure, and Michigan’s improvement could be an indication that its 2012 right-to-work law is producing employment growth.  (Not a bad lesson for Rhode Island.)


Another notable change this month is that BLS revised its numbers for jobs based in Rhode Island.  In general, the revision smoothed out the numbers, generally bringing them up starting in mid-2014.  One consequence of that change, however, is that 2015 saw an even smaller increase than had originally been reported.

In that regard, the stagnation in employment numbers observable starting last summer is reflected also in the slower growth of jobs based in the state.