Rhode Island’s economy is teetering on a recession, according to the latest economic overview by University of Rhode Island economist Leonard Lardaro.
Lardaro has published his monthly Current Conditions Index for years. The report usually lags by a couple of months. The latest tracks the state’s economy through June of this year, and each month since January the index has fallen well short of the previous year.
“The question as to whether Rhode Island’s economy is in a recession remains,” Lardaro said in his report. “I can’t entirely rule that out, and had it not been for all the tariff uncertainties, I would most likely would have made the recession call at this point.”
Because of those uncertainties, Lardaro said it is premature “to make a definitive recession call.”
“This month’s (June) data suggests while we might have been in a recession were it not for tariff uncertainties, we at least remain on a recession precipice,” Lardaro said.
Lardaro measures a dozen indicators, from unemployment rate to retail sales. On his scale, 50 is neutral. Anything higher indicates a growing economy. Anything lower, a contracting economy.
For June, the number was 42, well below the 75 in June of 2024. Here are the numbers for the first six months of 2025, versus 2024:
- January 2024 was 58; January 2025 was 50.
- February 2024 was 67; February 2025 was 33.
- March 2024 was 58; March 2025 was 16.
- April 2024 was 67; April 2025 was 50.
- May 2024 was 67; May 2025 was 42.
- June 2024 was 67; June 2025 was 42.
Meanwhile, the Boston Federal Reserve published its monthly economic data for Rhode Island and New England on August 19. That data shows Rhode Island unemployment higher than the rest of New England and the nation; the Consumer Price Index for New England higher than the United States; and Rhode Island’s home price index well above the region and the nation. Here’s a deeper look:
- Year to year unemployment rate: Rhode Island up 4.4 percent, New England up 3.5 percent, United States up 4.1 percent.
- Unemployment in June in Rhode Island, 4.8 percent; New England, 4.2 percent; United States, 4.1 percent.
- Consumer Price Index year to year was up 3.3 percent in New England, 2.7 percent nationally.
- Year to year, Rhode Island’s home price index was up 8.4 percent; New England, 6.8 percent; United States, 4.7 percent.
- Rhode Island was slightly ahead of New England, year to year, in total personal income, 3.6 percent to 3.3 percent for the region. Nationally personal income rose 4.5 percent.
Notable among Lardaro’s indicators was a sharp decline in United States consumer sentiment (minus 10.6 percent).
New home construction in Rhode Island has fallen rapidly, with single unit permits falling 26.7 percent, the fourth consecutive months single unit permits had dropped by double digits.
Benefit exhaustion, an indicator of long-term unemployment, rose dramatically by nearly 28 percent.
If there was a bright spot, Lardaro said, it was in retail sales, up 2 percent, but even there he cautioned that “the magnitude of front loading to avoid tariffs, while unknown, is diminishing.”