R.I. unemployment worst since 1992

The Associated Press
Published: October 16, 2008

PROVIDENCE—Rhode Island’s unemployment rate reached 8.8 percent in September, its worst showing since the last economic recession in 1992 and likely among the worst jobless rates in the nation, according to state figures released Friday.

Economists say Rhode Island entered a recession more than a year ago, ahead of the current meltdown on Wall Street. And it has sunk farther and faster than other states. The unemployment rate has increased slightly since August, when it stood at 8.6 percent.

By comparison, the national unemployment rate for September was 6.1 percent.

An estimated 1,300 jobs were lost in Rhode Island between August and September, according to a monthly survey by the state Department of Labor and Training. The number of unemployed now stands at 50,200, a record since state officials began keeping track in 1976.

The U.S. Bureau of Labor Statistics will not release unemployment figures for every state until Tuesday, but Rhode Island could prove an outlier - albeit in the wrong direction.

The state’s unemployment rate for August was the second-worst in the country, trailing only Michigan. But last month, Rhode Island apparently surpassed Michigan, where unemployment stands at 8.7 percent.

Rhode Island entered a recession in August 2007, said Edward Mazze, who tracks the state economy for the New England Economic Partnership. Battered by a sinking housing market and losses in the financial sector, the state is unlikely to recover until late 2009 or early 2010.

“We were definitely first into the recession, and right now it looks like we could be the last out of the recession,“ said Mazze, former dean of the College of Business Administration at University of Rhode Island.

The state conducted its unemployment survey in mid-September, before the turmoil on Wall Street deepened. As a result, Sandra Powell, director of the state Department of Labor and Training, said she worries the real unemployment figures could be worse than reported.

Compared with same period last year, Rhode Island lost 12,600 jobs, including 3,300 jobs in the manufacturing sector, 1,900 in retail trade, 1,400 in the financial sector and 1,300 in government.

Small companies with 20 or fewer workers account for nearly 90 percent of private employers in Rhode Island. Powell said the recession may stress those small employers worse than larger firms with more resources.

A sinking economy could also exacerbate Rhode Island’s budget problems. The state began the fiscal year in July with a $37 million budget deficit. As the economy contracts, state tax revenue has come in millions of dollars beneath expectations.