PROVIDENCE, RI – Reflecting resilience amid slower underlying growth, Rhode Island’s economic signals in the third quarter of 2025 were mixed, according to the Rhode Island Key Performance Indicators (KPI) Quarterly Briefing, released today by The Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council (RIPEC).
In Q3 2025, Rhode Island’s unemployment rate fell for the first time in nine quarters, from 4.9 percent to 4.6 percent. Despite the improvement, Rhode Island’s unemployment rate remained higher than both the United States and New England—each at 4.3 percent—for the seventh straight quarter. Employment also reversed its recent negative trajectory, with the number of employed residents rising by 2,600 (0.5 percent) after four consecutive quarters of decline. The number of Rhode Islanders employed remained 3,500 lower than a year earlier, however. Labor force participation, which had declined for four consecutive quarters, was unchanged in Q3 at 63.7 percent
Reflecting jobs that are based in Rhode Island, non-farm employment declined by 800 jobs (0.2 percent) in Q3 2025 but remained 2,300 jobs greater than in Q3 2024 and only 1,000 jobs below the record high level of 515,100 set in Q1 2025. The overall drop in non-farm employment was driven primarily by losses in leisure and hospitality (1,200 jobs) and education and health services (1,100 jobs). Five major industry sectors recorded employment gains in Q3 2025, although most were modest at 200 jobs or fewer. Government added 500 jobs but remained 400 jobs below its Q3 2024 level.
Net sales tax receipts—a key demand indicator—increased 2.2 percent in Q3 2025 and 2.2 percent in Q2 2025, compared to a 2.4 percent decline in Q1 (seasonally adjusted). In Q2 2025, Rhode Island’s Gross Domestic Product (GDP) grew by 0.5 percent (annualized), considerably smaller than GDP growth in New England (3.9 percent) and the United States (3.8 percent). GDP data from Q3 2025 are not yet available.
“Some economists are already labeling current Rhode Island economic conditions as a recession or ‘recession-adjacent.’ Historically, economists have often called recessions too early or too often. Recent data do show a slowing in Rhode Island and the regional economy, with weaker employment and GDP growth, particularly in Rhode Island. Still, the evidence does not support declaring that the economy is in recession now or that one is inevitable,” remarked Edinaldo Tebaldi, Professor of Economics and Vice President of Strategy at Bryant.
“Rhode Island’s economy showed a welcome easing in the unemployment rate and modest gains in resident employment in Q3,” said Michael DiBiase, President and CEO of RIPEC. “These are encouraging signs and point to a degree of stability in the state’s economy. However, continued weakness in labor force participation, the decline in Rhode Island-based jobs, and stronger regional and national performance in unemployment and GDP indicate that Rhode Island’s trajectory still merits close watch. Policymakers should remain focused on strengthening the state’s long-term competitiveness in the face of ongoing economic headwinds.”
The release of the Rhode Island KPI Briefing for Q3 was delayed because the U.S. Bureau of Labor Statistics employment reports it relies on were postponed due to the federal government shutdown.
The data set used to create the Briefing is available here.
