As I had noted in my prior posts, historically it has been very unusual for there to be more than a 1.5% difference (either more or less) between the unemployment rates if Massachusetts and Rhode Island.Lately though, we are seeing a historically unusual spread between Rhode Island’s high an accelerating rate and Massachusetts’ far lower but rising rate.
In fact, the current 3.5% spread now exceeds all spreads seen in at least 40 years.
This indicates that either Rhode Island’s current rate would need to fall dramatically or the Massachusetts rate would need to increase sharply…. My sense, especially in light of the financial turmoil seen in October, is that Mass will be the one playing catch-up.
Today’s state and regional unemployment report shows that, in August, the Rhode Island unemployment rate jumped dramatically to 8.8% while the Massachusetts rate increased only marginally (downward revision of August plus .1%) to 5.3%.
Although Massachusetts experienced the largest year-over-year gain since the recessionary environment that followed the tech-led dot-com bust, the spread between Rhode Island and Mass has opened even wider, to 3.5%, further indicating that Mass may be poised for explosive unemployment growth over the next several months.
