Also in July, Rhode Island lost 400 positions overall, the third monthly drop in a row, as the total number of jobs in the state declined to a little more than 510,000 jobs, according to the state Department of Labor and Training. But while the state has been losing jobs, the number of employed Rhode Islanders increased by 600 people last month, to 565,400. That could be becausesome Rhode Island residents are benefitting from flexible work arrangements or have jobs they commute to in neighboring states, like Massachusetts. The most recently available data shared with the Globe by the state’s Labor Department showed that nearly 16 percent of Rhode Islanders worked out of state in the period between 2016 and 2020.
“Our labor force keeps going up and our employed Rhode Islanders keep going up and setting records,” said Michael DiBiase, president and CEO of the Rhode Island Public Expenditure Council, a Providence-based think tank. “But the Rhode Island based jobs has gotten a little sluggish.”
The softening of the labor market in Rhode Island comes at a time when the US jobs market has also been cooling. The national unemployment rate also went upin July, to 4.3 percent. Massachusetts also saw the jobless rate tick up to 3.5 percent in July, compared to 3.2 percent the prior month, according to the Bureau of Labor Statistics.
Matthew Weldon, the director of Rhode Island’s Labor Department, said that a jump in the unemployment rate was part of a volatility that can happen at times in a jobs market. He pointed out in May 2023, the state’s unemployment rate fell to a historic low of 2.6 percent, and the recent increase could be a sign that the jobs market was normalizing. “Typically it gradually goes up and gradually comes down. A year ago we were at the lowest rate in recorded history, and now it’s headed back to what’s probably a more normal rate,” he said. There are nearly 19,000 more people in the labor force now compared to a year ago, which he said is the biggest contributing factor to the spike in the unemployment rate.
Weldon acknowledged that in recent months, there have been signs that some sectors were seeing a decline in jobs. The accommodation and food services industry, for example, lost 1,600 jobs in July. Over the last three months, that segment of the jobs market reported a 3,500 fall in positions. Other sectors are holding up, with government jobs up 1,000, the bulk of which came from local government. Meanwhile, health care and social assistance added 700 workers, continuing its streak of not posting a drop in jobs that goes all the way back to October 2023, according to the state Labor Department.
Weldon suggested that the data may be overstating the extent of the losses. “What I believe is happening is in a couple of key categories, and in accommodation and food services being one of the most important, we are certainly not gaining jobs, but I don’t believe we’re losing as many as they are reporting,” he told the Globe. “I believe we’re simply not adding as many as we anticipated.”
The employer survey sometimes can provide over-estimates, Weldon added, and next month’s revisions could paint a different picture.
“We’ll revise the job counts next month. But then in February every year we do a benchmark of the whole prior year’s data. That’s when we’re able to get to use actual job data, which comes in through wage records and other things, and match that up against what the estimates were for the surveys,” he said. “So, we won’t know until February for sure, you know, what these months showed. My guess at this time, just from having done it as long as I have, is I think it’s going to smooth itself out a bit.”
Michael Lynch, associate director of US Regional Economics at S&P Global Market Intelligence, told The Globe that an expanding labor force was part of the story behind the jump in the unemployment rate. Unemployed workers actively looking for employment may be having to wait slightly longer to secure a job.
“Some of the individuals that entered the [Rhode Island] labor force during the period in question are taking time to find work, contributing to the rise in unemployment,” he said. “So, although we are not attributing the rise in unemployment to a major surge in layoffs… it isn’t the case that all those entering the labor force to search for work are finding it right away.”
The increase in people looking for jobs is a positive sign for the labor market, even if it was contributing to a jump in the unemployment rate, said Leonard Lardaro, professor of economics at the University of Rhode Island.
“The job market here is doing well,” he said. “Unemployment rate is higher, but for the right reasons, more unemployed people are now looking. That’s going to help alleviate labor shortages and it’s going to moderate wage pressures.”
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Omar Mohammed can be reached at [email protected]. Follow him on Twitter (X) @shurufu.
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Publish date : 2024-08-22 12:59:00
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