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In a news report that drifted into this author’s awareness, recently, an analyst explained Rhode Island’s employment boost in terms of seasonal changes. To the contrary, the numbers are supposed to be seasonally adjusted (to bring out underlying trends), and the pattern of this year looks a lot like the patter of last year. Rhode Island begins the first six months with an inexplicable jump in employment, which levels off or decreases and is followed by a substantial downward revision when the data for the year is in.

Therefore, as we assess the Ocean State’s 6.1% unemployment rate, as reported by the federal Bureau of Labor Statistics (BLS), which is now out of the bottom 10 nationally and is not the last in New England, we should be aware that we’re likely just in the (largely unrealistic) annual upswing.

According to the BLS, in March, a net 2,846 Rhode Islanders gained employment, while 1,826 joined the labor force. Those two variables are the basis for the unemployment rate. The first chart below shows that this year represents the start of a rebound in a long decline… if the numbers are correct.

The second chart shows how far Rhode Island is behind its neighbors. (Note that this month’s iteration has a different axis to accommodate Massachusetts’s growth.) Both Connecticut and Massachusetts are now well above their labor force and employment rates as of January 2007, while Rhode Island isn’t even close. Indeed, beginning in April, Massachusetts now has better growth in employment than in labor force.

The final chart shows the importance of labor force. The blue line is the official unemployment rate; the red line is what the rate would be if residents weren’t giving up their quest for work. Unemployment would still be 9.5% in Rhode Island with the January 2007 size of the labor force.

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If Rhode Islanders haven’t completely tuned out reports about the state’s unemployment rate, they may have heard the triumphant call, this week, that not only has their state climbed out of the lonely pit in the bottom three of the national ranking, but it’s no longer even last in New England. Looking at the data, however, shows how inapplicable a metaphor like “climbed out” is.

According to the federal Bureau of Labor Statistics (BLS), in February, a net 1,725 Rhode Islanders gained employment, while 659 joined the labor force. Those two variables are the basis for the unemployment rate, and as the first chart below shows, the lines are generally moving toward each other. That has the effect of reducing the unemployment rate more quickly than the modest increases in employment would generally suggest.

The second chart shows how ridiculous it is to portray Rhode Island as doing better than Connecticut. The Nutmeg State has a higher unemployment rate because, despite its much stronger increases in employment, even more people have decided to look for work, there. In other words, its higher unemployment rate is ultimately an indication of its better economic health.

The final chart illustrates the condition that the Ocean State would be in if its residents weren’t giving up their quest for work. Even with recent improvements in employment, the unemployment would still be 10.4% if as many people were looking for work as were doing so in January 2007.

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Labor force and employment numbers from the federal Bureau of Labor Statistics (BLS) are due for their annual revision, soon, and there’s reason to believe Rhode Island will see its 2014 lose some of its rosey sheen. However, even before that happens, if it happens, the state’s unemployment rate — which fell below 7% in December for the first time since April 2008 — does not indicate what most residents probably believe that it indicates.

According to the BLS, in December, a net 1,266 Rhode Islanders gained employment, while 698 left the labor force — which means they’ve stopped looking for work. That combination explains why the unemployment rate dropped so much (to 6.8%, from 7.1%) month to month

The first chart at right shows how the labor force continues its decline. The chart also puts the seemingly significant increase in employment in perspective. The first half of 2014 saw a large (and inexplicable) jump in employment, but the second half saw no improvement at all — indeed, a small decrease.

The second chart shows how far behind Rhode Island continues to be. Both of the Ocean State’s neighboring states are now well above their labor force and employment levels of January 2007. Rhode Island? Not even close, and not improving.

The final chart illustrates what the unemployment rate would look like if the labor force weren’t shrinking. Even with the employment boost in December, Rhode Island’s unemployment rate would still be well over 10% if as many people were looking for work as were working or looking in January 2007. Specifically, Rhode Island’s unemployment rate would have been 10.6% in December.

The commentary coming out of Rhode Island’s monthly employment data for October has generally been about the mixed results.  Employment (people who tell interviewers that they are working) was up 1,124 people from September, but the labor force (people telling interviewers that they are working or looking for work) was down 336, while jobs (tax and survey data about jobs that actually exist in Rhode Island) were down 2,600.

Some of the commentary has suggested that Massachusetts is hiring Rhode Islanders at a high rate, but that seems unlikely.  Combined, Connecticut and Massachusetts created 4,800 jobs, well over what Rhode Island lost.  However, between Rhode Island’s two neighbors, an additional 25,285 people stated that they were working.  So, a straightforward analysis would find that the residents in the rest of Southern New England are claiming all the new jobs in their states and then some.

Some of the difference between the metrics may be that employment also includes people who are self employed or working off the books.  As the economy continues to stagnate, in terms of employment, people may increasingly be looking for ways — any ways — to have some income. More likely, however, the numbers are simply off and awaiting a substantial revision, probably making employment more negative and jobs more steady.

Whatever the case, Rhode Island’s official unemployment rate stood at 7.4% in October, according to data from the federal Bureau of Labor Statistics (BLS).  The rate hasn’t been that low since May 2008, but far fewer people say that they are actually looking for work.  That has the effect of improving official unemployment on paper.

The first chart below shows that the substantial increases in labor force and employment of the first half of the year have turned into relative stagnation.

The second chart shows that both Massachusetts and Connecticut have reached the milestone of having larger labor forces and more employment than January 2007.

The third chart shows that the unemployment rate would still be hovering just under 11.0% if Rhode Island’s labor force hadn’t shrunk so much since the beginning of the recession.