Once again, Rhode Island’s unemployment rate dropped, from 5.7% in August, to 5.4% in September, according to data from the federal Bureau of Labor Statistics (BLS). That was, however, a silver lining built on an entirely dark cloud. Employment actually dropped by 521 people, but 1,860 Rhode Islanders gave up looking. At the same time, the number of jobs based in the state fell by 1,800 — for a total drop of 3,700 from July.
The first chart below shows that this dip follows a long increase in employment and labor force. However, the number of jobs based in the state has been relatively stagnant, suggesting that the employment numbers will be revised downward at the end of the year. Employment data is based on a phone survey that the BLS conducts in each state and heavily adjusts according to benchmarks and assumptions about seasonal changes.
In the second chart, both Massachusetts and Connecticut are down from last month’s results. Still, Rhode Island alone remains well below its employment and labor force as of January 2007.
The third chart is the most illustrative of the skepticism that readers should have when watching the unemployment rate. The red line shows what the curve would have been if the labor force had not shrunk since January 2007. In that case, the unemployment rate would still be 8.1% and would have begun edging back up, in September.