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Rhode Island's top labor official says improving US economy spurs job growth in the state

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PROVIDENCE, Rhode Island — The improving national economy is finally spurring job growth and pushing the unemployment rate down in Rhode Island, according to the state's top labor official.

Rhode Island is nearing pre-recession employment levels. The state has added 1,200 jobs since June and a total of 5,600 jobs in the past year, bringing the number of non-farm jobs to 477,800. That's the highest number since September 2008.

Rhode Island's unemployment rate has been among the worst in the U.S. for years. Now with a rate of 7.7 percent, Rhode Island moved out of last place and is tied with Michigan and Nevada, ahead of last place Mississippi and Georgia. The state's rate is the lowest it has been since June 2008, having fallen nearly 2 percentage points in the past year.

Department of Labor and Training Director Charles J. Fogarty said Rhode Island is late to benefit from the national trends because it was hit particularly hard by the housing market crash and the decline of U.S. manufacturing.

"We were hit harder and have been behind the eight ball longer," he said. "At a certain point you do start to catch up. I believe that's what is happening now."

University of Rhode Island economist Leonard Lardaro said Rhode Island relies on the national economy because it has not reinvented itself as other states have. Lardaro said the state's labor force does not have sufficient skills, and high fees and excessive regulations do not encourage businesses to move to Rhode Island or expand. He attributes part of the drop in the unemployment rate to residents finding work and commuting to neighboring states that are faring better.

"We're clearly doing better," he said. "But number three in the country is terrible. Number one in the country was God awful. And you have to really wonder, what is going to make us break out of this so we're no longer known as 'the unemployment rate state?'"

Fogarty said state officials are focused on developing a trained and ready workforce and improving the business climate, which, in turn, will make it easier for residents to find jobs in Rhode Island.

Since the end of the recession, Rhode Island has recovered 21,900 jobs, or 55 percent of the total jobs that were lost. Both Connecticut and Massachusetts have recovered a greater portion.

In Rhode Island, the professional and business services sector has experienced the most job growth, adding 10,300 jobs since August 2009, according to the DLT.

The manufacturing sector lost 500 jobs in July. Bill McCourt, executive director of the Rhode Island Manufacturers Association, said the job statistics are only one measure of the industry's health. He said the value of the products produced by Rhode Island companies is increasing and manufacturers are investing in their businesses because they see work ahead. He said most of the manufacturers he deals with are now more optimistic about the future.

Rhode Island's economy grew by 3 percent in the second quarter and is projected to grow in the third quarter by 2.5 percent, which is higher than in recent quarters, according to a new report by the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council.

The report released Monday says the expansion was driven by the growing national economy and job gains in the construction and professional and business services industries. John Simmons, the council's executive director, said the forecast indicates the state's economy has stabilized and is poised to trend similarly to the national economy.

Fogarty said it's not yet time to celebrate.

"I think the news is good," he said, "but keep the champagne on ice."

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