Jul. 5--Here's a snapshot of the Rhode Island economy at midyear.

It's based on government data, economists' forecasts, reports by The Providence Journal's commerce and consumer staff and my observations from covering the state for 20 years.

Overview

The Rhode Island economy has been contracting since 2007, affecting job creation, the housing market and private investment.

The state has shed jobs for 16 straight months and the unemployment rate has risen to record levels.

Median house and condo prices continue to slide from their peak in 2006.

Private investment, especially in downtown Providence, has slowed. Some projects have been shelved.

While there are early signs that the recession is starting to loosen its grip on Rhode Island, the state's economy fell so far so fast and for so long that the recovery will be slow, gradual and uneven.

Some economic activity and job creation will be generated from public projects, such as highway relocations, and expansions by the state's colleges and universities.

Federal stimulus funds have begun to flow into the state. However, most of the money so far has been spent to close deficits in state and municipal budgets and provide social services.

Longer term, the expansion of T.F. Green Airport, plans to build wind turbines off Rhode Island's coast and the development of a life sciences industry could provide future economic growth.

Jobs

Rhode Island's unemployment rate rose from 11.1 percent in April to 12.1 percent in May, the highest on record and the third highest in the United States. There were 68,500 residents out of work.

The state lost 20,700 jobs in the last year. Most sectors have seen declines, with the heaviest losses in manufacturing, construction and retail. The number of manufacturing jobs in Rhode Island has decreased every year since 1990, dropping to 43,600 in May from 95,100 in 1990.

Economists forecast the Rhode Island jobless rate could rise to 13 percent later this year. There will be little or no job growth in the first two quarters of 2010, while only 4,000 jobs will be created in the latter half of next year, according to a forecast by the New England Economic Partnership, a non-profit regional forecasting group.

"The unemployment rate will not be below 10 percent until 2011," NEEP estimates.

Since the start of the national recession in December 2007, all six New England states have reported increases in their unemployment rates.

New England's unemployment rate in May was 8.3 percent. The rates in each state were: Maine, 8.3 percent; Massachusetts, 8.2 percent; Connecticut, 8 percent; Vermont, 7.3 percent; and New Hampshire, 6.5 percent.

The U.S. jobless rate in June was 9.5 percent, up from 9.4 percent in May.

Housing

The median price of a single-family house fell to $190,000 in May, down 24.8 percent from May 2008. House prices peaked in the first quarter of 2006 at $280,000.

House sales in May were up 2 percent. About one-third of the sales, however, were "distressed sales," meaning they were sold through foreclosures or short sales.

The median price of condominiums fell 31 percent from $231,500 in May 2008 to $159,000 in May 2009. The number of units sold dropped 35 percent, to 91 in May 2009.

The median price of multi-unit houses plunged 48 percent to $82,000 in May 2009. Sales increased over the 12-month period, from 119 to 172.

Some housing officials say the end of the slump is finally in sight in the latter half of 2009, but price appreciation in 2010 will be weak. One key factor will be if Rhode Island's high rate of foreclosures and mortgage delinquencies start to shrink. A national economic recovery will also help the local economy and housing market.

State budget / revenues

Revenues from taxes, fees, lottery games and other sources fell by 14 percent in the first 11 months of the fiscal year that ended on Tuesday. Total revenues fell by $405 million, to $2.486 billion, for the 11 months through May 31, according to the Department of Revenue.

A $590-million budget deficit for the fiscal year that began Wednesday was closed with federal stimulus money, some pension reform, cuts in aid to cities and towns, some reductions in state spending, fee increases and a hike of 2 cents per gallon hike in the gasoline tax.