Sluggish.
That’s the word that best describes the state of the economy in New England and Rhode Island, on the heels of what has been widely described as a troubling national jobs report.
The national economy added just 22,000 jobs in August, well below the 76,000 that had been projected, according to the Bureau of Labor Statistics. The unemployment rate nationally ticked up to 4.3 percent, the highest in four years. According to the Federal Reserve Bank of Boston, unemployment in New England was 4.2 percent in June, the latest month they have reported, and 4.8 percent in Rhode Island.
“New England’s labor market displayed ongoing sluggishness in July … and various evidence pointed to weak hiring activity over the past 12 months.”
Meanwhile, various news media mirrored that of Reuters: “U.S. job growth weakened sharply in August, and the unemployment rate increased to nearly a four-year high of 4.3 percent, confirming that labor market conditions were softening…”
The regional and Rhode Island data is included in a series of reports issued by the Federal Reserve Bank of Boston on September 5.
University of Rhode Island economist Leonard Lardaro, in his most recent Current Conditions Report, said Rhode Island is teetering on a recession. The Boston Fed numbers support that.
- Average weekly initial claims for unemployment insurance for June: for the U.S. up 1.7 percent; New England, down 4.2 percent; Rhode Island, up 5.4 percent.
- Total personal income, up 4.5 percent nationally, 3.2 percent in New England, and 3.6 percent in Rhode Island.
- Consumer Price Index, up 2.7 percent nationally, and 3.3 percent in New England. The Boston Fed did not report a separate Rhode Island CPI.
- House prices continue to rise more rapidly in Rhode Island than elsewhere. For the first quarter of 2025, home prices rose 8.4 percent in Rhode Island compared to the previous year. Nationally, home prices increased 4.7 percent, and regionally, 6.8 percent.
- Total personal income rose 4.5 percent nationally; 3.2 percent in New England; and 3.6 percent in Rhode Island.
Other observations made by the Boston Fed in its economic index and beige reports:
- “Some firms remained hesitant to make major hiring decisions” because of the uncertainty of economic policy, and some of those that are hiring are choosing to hire temporary employees.
- The Beige report is published eight times a year, and is a summary of conversations with employers, economists, and market experts. One clothing retailer said he hiked prices 10 to 15 percent because of tariffs, and another rose prices slightly because of tariffs.
- “Consumer confidence in New England deteriorated somewhat in August from one year earlier, driven by a decrease in consumers’ future expectations…” According to the Boston Fed, consumer confidence in New England and nationally dropped 8 percent.
U.S. job growth weakened sharply in August, and the unemployment rate increased to nearly a four-year high of 4.3%, confirming that labor market conditions were softening and sealing the case for a Federal Reserve interest rate cut later this month.
