PROVIDENCE, RI – – Rhode Island’s labor market weakened in the second quarter of 2026, with a sharp decline in labor force participation and a substantial drop in the number of employed Rhode Islanders, according to the Rhode Island Key Performance Indicators (KPI) Quarterly Briefing released by the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council (RIPEC). While the unemployment rate improved in Q2, this improvement was driven by the decline in labor force participation rather than labor market strength.
Following two quarters of increase, Rhode Island’s unemployment rate fell from 4.6% to 4.3% in Q2 2026, matching both New England and the U.S. The number of unemployed Rhode Islanders fell by 2,000 quarter over quarter, to 25,100. Even though unemployment fell, however, resident employment decreased for a fourth consecutive quarter, declining by 5,700 jobs (-1.0%), reaching its lowest level in over four years. The number of Rhode Island-based jobs, or nonfarm employment, also decreased in Q2 2026, with the state shedding 600 jobs, a 0.1% decline.
Declines in both unemployment and employment reflect individuals leaving the labor force, as Rhode Island’s labor force participation rate fell sharply, from 63.5% in Q1 to 62.6% in Q2. Marking the eighth consecutive quarter of decline since peaking at 64.7% in Q2 2024, the Ocean State’s labor force participation rate fell by 2.1 percentage points over this period, a trend that outpaced decreases in the New England region (-1.2 percentage points) and the U.S. (-0.9 percentage points).
Despite these negative labor market indicators, preliminary net sales tax receipts, a key indicator of aggregate demand, showed strong year-over-year growth, increasing 4.3% (seasonally adjusted), and rising 2.2% quarter over quarter.
After contracting in Q4 2025, Rhode Island’s Gross Domestic Product (GDP) grew at an annualized rate of 1.5% in Q1 2026—the most recent quarter for which data are available. Rhode Island GDP growth trailed New England (2.0%) and the U.S. (2.1%)—consistent with a longer-standing trend of relatively sluggish GDP growth in the Ocean State.
In Q2 2026, Rhode Island gained jobs in three of nine major industry sectors, lost jobs in three sectors, and experienced essentially flat employment in the remaining three. Trade, transportation, and utilities—the state’s second-largest sector—posted the largest quarterly gain (+900 jobs), while leisure and hospitality recorded the largest decline (-1,600 jobs).
The data set used to create the Briefing is available here.
