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Economists are trying to find some hope in the current economic situation in Rhode Island. Trying not to be dampened by the persisting house repossession activity in the state, economists pointed out some positive news, including the slowing unemployment, few jobless claims and home sale gains.
In June, Rhode Island posted an unemployment rate of 12.4, making it the second highest among states, behind Michigan. Some economists noted that the figures could be worse if taken into account the almost 25 percent of people who have settled for having part-time jobs or just gave up looking for employment.
Economists are hoping that these positive news, withstanding the growing foreclosure activity, could indicate the end of recession in the state and the start of the recovery. However, they cautioned that people who have been jobless for quite awhile would not find it easy to get back on their feet immediately because the future for the job market will continue to be bleak for some time.
A survey of state residents’ attitude in May showed that 69 percent of respondents personally knew relatives or friends who lost their jobs. The survey noted that even people who have stable employment are being affected by the economic downturn.
Overall, Rhode Island’s economy is in a poor state. The bankruptcy rate in the state rose by 8 percent in the first half of 2009, compared with the same period the previous year. The number of people who have depleted their resources, indicating that they have been without work for a long time now, increased twice in June.
Furthermore, the median value for single family homes in the state dropped by 23 percent from April to June this year compared with the same period last year. Meanwhile, the median sale price for single family homes declined by 6 percent. But the figures exclude sales of short sales or foreclosures.
Industry analysts said that the increase in the number of properties sold was due to low prices and interest rates, in addition to the federal tax credit of $8,000 for first-time buyers.
On the other hand, economists are expecting an easing in the employment market despite the continuous increase in the unemployment rate. Their optimism is pushed by the slow pace of unemployment claims. They believe that Rhode Island’s unemployment rate would go down if people will start to move out of the state or find employment in neighboring states of Connecticut or Massachusetts.