PROVIDENCE — Rhode Island’s unemployment rate in May was 2.9 percent, the first time it’s been below 3 percent in more than 30 years, the state Department of Labor and Training said Thursday.
Experts like Justine Oliva, manager of research at the Rhode Island Public Expenditure Council, are quick to point out that month-to-month jobs numbers can fluctuate more substantially than quarterly figures, especially in a state the size of Rhode Island.
“With that caveat, 2.9 percent is an extraordinary number,” Oliva said.
May’s unemployment rate compares to 3.2 percent in April and 6 percent in May 2021. The national unemployment rate was 3.6 percent this May.
Other data released Thursday showed a more nuanced picture of jobs in Rhode Island. The labor force — a measure of everyone working or looking for work — was 570,100, up 1,100 month over month but down 2,500 from May 2021, and still short of pre-pandemic levels. Even as the unemployment rate has fallen below pre-pandemic levels, there are 1,700 fewer Rhode Island residents in the labor force than there were in February 2020, before pandemic shutdowns began. It’s down some 6,000 since the high water mark from November 2019, Oliva said.
Also, for jobs actually based in the state, Rhode Island has only recovered about 90 percent of the jobs it lost at the beginning of the pandemic, whereas the nation as a whole has recovered 97 percent, Oliva said.
“The main takeaway is that a low unemployment rate is certainly a good thing, and there are positives in this monthly jobs report, but that a low unemployment rate doesn’t necessarily speak to economic output as much as some might expect,” Oliva said.
The jobs report comes as the Federal Reserve hikes interest rates in an effort to cool rampant inflation while not plunging the country into a deep recession, a difficult balancing act.
Leonard Lardaro, professor of economics at the University of Rhode Island, tends not to look at the monthly unemployment percentage number at all. The unemployment rate lowers not just when more people get jobs, but also when some people stop looking for work altogether.
Lardaro uses a term for Rhode Island’s economic performance in past downturns: first in, last out. If the nation does experience a recession, Rhode Island policymakers haven’t done anything to change that trajectory, Lardaro said.
“Our economy is clearly improving,” he said, “but we had a long way to go, and we’re vulnerable to national weakness that might be the result of Fed overtightening.”