Unemployment in Rhode Island finally falls below 10%

PROVIDENCE, R.I. (WPRI) - Rhode Island's painfully slow economic recovery hit an important symbolic milestone in December as the jobless rate fell below double-digits for the first time in nearly four years, new data released Thursday shows.

Rhode Island's unemployment rate was 9.9% in December, lower than the 10.2% originally reported, the R.I. Department of Labor and Training said in a statement. The unemployment rate was 7.8% nationwide and 6.7% in Massachusetts the same month.

"We've broken a kind of psychological barrier with that 10% mark," Labor and Training Director Charlie Fogarty told WPRI.com. "We still have a long way to go."

Gov. Lincoln Chafee said the new numbers showed his administration's commitment to "a climate of certainty, stability, and predictability" was giving employers confidence. "I am encouraged, though not surprised, to see that our economic recovery in Rhode Island has been more robust than originally reported," he said.

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The state's jobless rate had been at least 10% since March 2009, as the Great Recession sent unemployment soaring from 4.8% in March 2007 to a record high of 11.9% in January 2010.

Officials say the revised numbers are a more accurate depiction of the state's employment picture because they're based on comprehensive data from employers' tax returns rather than the monthly surveys that are used to track unemployment during the year.

"While estimates of the Rhode Island monthly unemployment rate originally indicated an uptick in spring 2012, the revised rates show a consistent month-to-month decline in the Rhode Island unemployment rate over the year," the department said in a statement.

Chafee - who has struggled to improve his dismal job approval rating since succeeding Don Carcieri in 2011 - said he will continue to push funding for education and transportation, reform regulations, train workers and help municipalities in a bid to push the recovery.

"Things are getting better in Rhode Island, and I look forward to continuing to move our state forward with an improved and sustainable economy," the governor said.

The revised figures showed 465,600 jobs on Rhode Island nonfarm employers' payrolls in December, an increase of 6,800 compared with the original estimate. They also showed the total number of Rhode Islanders in the labor force - both employed and unemployed - was lower than originally estimated at 563,200.

"Clearly the trend is that we're moving in the right direction - at a much slower pace than we'd like,  but we're moving in the right direction," Fogarty said.

The industry that employed the most Rhode Islanders as of December was education and health services, with 103,900 jobs on its payroll, or 22% of all employment in the state. The trade, transportation and utilities sector was a distant second with 73,700 jobs, or 16% of all employment.

The next-largest employment sectors were government (59,700 jobs), professional and business services (57,600 jobs), leisure and hospitality (51,600 jobs) and manufacturing (40,200 jobs).

However, employment in some industries is still nowhere near its level before the recession.

Rhode Island's manufacturers, for example, cut 11,600 jobs between December 2006 and December 2012 - a 22% job in manufacturing employment over six years. The state's construction industry was hit even harder, with the number of jobs down 37% over the last six years, as 8,500 jobs disappeared.

Only three industries employed more Rhode Island workers in December 2012 than they did six years earlier: education and health services, with 5,700 more jobs, a 6% increase; leisure and hospitality, with 800 more jobs, up by 2%; and professional and business services, with 500 more jobs, an increase of 1%.

Labor and Training Department spokeswoman Laura Hart said the Governor's Workforce Board RI, which provides grants to fund job training at companies, has industry partners in the construction and manufacturing sectors that help ensure funds are directed to those sectors.

Fogarty said the Chafee administration is trying to balance pressure to bring unemployment down faster against the risks of acting too hastily.

"If there was a switch to flip to turn things around it would have been flipped," he said. "The recognition is we have to do everything we can as quickly as we can but it has to be done right, because we have had too many examples ... where we have gone for trophy projects and pie-in-the-sky proposals that haven't worked."

Fogarty said he is still awaiting instructions from the federal government about how to handle the so-called sequester, automatic spending cuts that are set to take effect on Friday. The department estimates the cuts will reduce jobless benefits for about 7,500 unemployed Rhode Islanders by roughly 10% starting next month.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog. Follow him on Twitter: @tednesi