Although Rhode Island’s unemployment rate held relatively steady in July, from June, the underlying numbers show a much worse picture.  The number of Rhode Islanders who told representatives of the Bureau of Labor Statistics (BLS) that they are employed (full or part time) dropped by 2,379 — the seventh largest percentage-wise drop in the country. The only reason that barely registers in the unemployment rate is that 2,538 fewer people said they are even looking for work.

If the labor force had remained the same from June to July, Rhode Island’s unemployment rate would have shot up to 9.3%.  All of the state’s miniscule employment gains back to last October have been lost, and the labor force is now back to its size in early 2005, which was itself significantly lower than it had been.

Throughout the last legislative session, the state government’s buzz phrase was “moving the needle.”  The following chart shows how the needle moved after they wrapped up their work in the early summer.

It’s true that only four states in the entire country avoided decreases, but most New England states held relatively steady.  Indeed, Connecticut was one of the four in the country to buck the national trend. The following chart shows Rhode Island’s trends in the context of its neighbors.

As a consequence of this drop, Rhode Island’s employment level worsened relative to its history and the rest of the country.  If current trends persist, it won’t be long until Rhode Island is the farthest state from its pre-recession peak employment.

One of the few cuts of this data that has offered some little bit of encouragement in prior months was employment growth since the end of the employment free fall in February 2010.  When we began tracking this, last year, Rhode Island was in the negative, worst in the country.  July’s numbers put the Ocean State back on the cusp of being negative again.