As predicted by the Rhode Island Center for Freedom and Prosperity, the 2015 unemployment rate for Rhode Island was revised to paint a less rosy picture than previously believed. Per the final 2015 data, the monthly reports from last year appear to have painted an incomplete and misleading snapshot of the true jobs and economic picture in the state, in an analysis posted today by the nonpartisan Center. The monthly data from last year reported 2626 people in the workforce as well as 4278 workers that simply did not exist, representing a near one percentage point drop in employment, and a false perception of progress.
Per the post, instead of an initially reported unemployment rate of 5.1%, the revised 2015 rate shot upward to 5.4%. Further, what was reported as 29 straight months of improvement, included a current level of stagnation. As the Center has maintained for years, the claims of improvement in the employment rate are not relevant unless also compared to gross employment, where Rhode Island still ranks in the bottom four in the country, as it pertains to employment recovery since the most recent recession.
"It is clear that the traditionally cited unemployment rate is not a reliable measure of the true status of our state's job market and economy. It is vital that lawmakers see the larger picture." said CEO, Mike Stenhouse, "This why our Center will be publishing its own statewide index and will raise awareness about a new Family Prosperity Index that is being introduced by a national research firm later this month."
While the U.S. Bureau of Labor Statistics (BLS) measures six levels of unemployment, U1 thru U6, it is only the U3 unemployment rate that is the basis for the official monthly unemployment rate: U3 narrowly measures the number of unemployed people as a percentage of the labor force. However, U3 is largely dependent on labor force size; so in keeping with the trend of recent months in Rhode Island, when the labor force drops, usually considered a negative economic indicator, it generally produces a lower U3 unemployment rate, which is conversely seen as a positive.
For other graphs, charts and a more detailed analysis of Rhode Island's November employment status, see the related post on The Ocean State Current.
New JOI Index in 2016: In order to provide Rhode Islanders with a broader and more accurate picture of the state's actual jobs market, in March of 2016, the Center plans to publish a monthly Jobs & Opportunity Index, which will incorporate other BLS unemployment categories and which will also measure the size and scope of the state's private sector as compared with the size and scope of state government.