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Nevada Economic Conditions

May 7, 2008

There are more negatives than positives for the current monthly indicators. Both Reno (Washoe County) and Las Vegas (Clark County) continue to experience an economic slowdown. We find negative values for most of the same month year-ago percentage changes. Current indicators show that 8 of 9 for the Reno metro area and 7 of 9 for the Las Vegas metro area have weakened. Moreover, unemployment rates for Nevada and its two metro areas have exceeded the U.S. rate. Job growth has stalled-no longer do we find the Silver State creating more jobs than those entering the work force.

Conditions in Reno, where the unemployment rate has jumped to 6.2 percent, have worsened more than in Las Vegas, where the unemployment rate has increased to 5.6 percent. With more people looking for work, it is not surprising that other measures of well-being have also softened. Taxable sales, a reflection of overall spending, is down sharply for Washoe County (15.1 percent) and down moderately for Clark County (3.1 percent). Nevada gaming revenue is down 3.9 percent from the same month a year ago. These losses in major state revenue sources have the Nevada state government scrambling to balance revenues and spending.

Housing conditions remain weak. Reno and Las Vegas housing markets remain imbalanced. Excess supplies of housing have sellers upside down-that is, the going market price for housing is less than the previous purchase price. Real-estate market activity has softened, except but for bargaining hunting for foreclosures. In addition, credit markets grapple with less solvency and greater illiquidity than in the past. Deflation has reduced wealth holdings and efforts to correct past financing excesses have increased lending standards. Over time markets will correct these conditions. In the meantime, however, economic performance will remain weak.

U.S. housing starts and auto and truck sales continue to post negative rates of change. Still, real gross domestic product (GDP) posts marginally positive rates of change, keeping us out of an official declaration of a national recession. The U.S. unemployment rate is hovering at the 5 percent level, a long ways from the peak of the 1973-1974 recession when unemployment reached near 9 percent. It will take far greater depth of economic travail and longer duration of economic misery before conditions in the Silver State become the worst since the adversity of the 1930s as some have suggested.

R. Keith Schwer, Ph.D.
Director, CBER


Current Nevada Economic Statistics
Data Growth
Nevada Date Units Latest Previous Year Ago Recent Year Ago Comments
Employment 2008M3 000 employees 1,286.8 1,284.8 1,290.7 0.2% -0.3% Weak
Unemployment Rate 2008M3 %, NSA 5.8 5.7 4.4 1.8% 31.8% Trending Up
Taxable Sales 2008M2 $billion 3.621 3.524 3.826 2.7% -5.4% Trend Down
Gaming Revenue 2008M2 $million 1,014.82 1,064.09 1,056.37 -4.6% -3.9% Down
Passengers 2008M3 passengers 4.604 4.026 4.722 14.4% -2.5% Trend Down
Gasoline Sales 2008M2 million gallons 90.21 89.93 87.56 0.3% 3.0% Price Effects
Visitor Volume 2008M2 million visitors 4.057 4.030 3.976 0.7% 2.0% Soft
Clark County
Employment 2008M3 000 employees 925.5 925.6 927.9 0.0% -0.3% Weak
Unemployment Rate 2008M3 %, NSA 5.6 5.4 4.3 3.7% 30.2% Trending Up
Taxable Sales 2008M2 $billion 2.757 2.670 2.845 3.3% -3.1% Trend Down
Gaming Revenue 2008M2 $million 865.97 928.65 901.95 -6.7% -4.0% Down
Residential Permits 2008M2 units permitted 562 1,530 2,024 -63.3% -72.2% Down
Commercial Permits 2008M2 permits 58 58 114 0.0% -49.1% Trend Down
Passengers 2008M3 million persons 4.164 3.618 4.235 15.1% -1.7% Trend Down
Gasoline Sales 2008M2 million gallons 64.29 63.64 61.07 1.0% 5.3% Price Effects
Visitor Volume 2008M2 million visitors 3.495 3.507 3.408 -0.3% 2.6% Soft
Washoe County
Employment* 2008M3 000 employees 221.1 220.7 222.2 0.2% -0.5% Weak
Unemployment Rate* 2008M3 %, NSA 6.2 6.2 4.5 0.0% 37.8% Trending Up
Taxable Sales 2008M2 $billion 0.476 0.473 0.561 0.7% -15.1% Trend Down
Gaming Revenue 2008M2 $million 77.45 65.96 80.57 17.4% -3.9% Down
Residential Permits 2008M2 units permitted 110 86 136 27.9% -19.1% Trend Down
Commercial Permits 2008M2 permits 8 11 22 -27.3% -63.6% Down
Passengers 2008M3 million persons 0.435 0.404 0.481 7.8% -9.5% Trend Down
Gasoline Sales 2008M2 million gallons 13.98 13.76 13.92 1.6% 0.4% Price Effects
Visitor Volume 2008M2 million visitors 0.368 0.331 0.379 11.4% -2.8% Soft
U.S.
Employment 2008M3 million, SA 137.846 137.926 137.310 -0.1% 0.4% Down
Unemployment Rate 2008M3 %, SA 5.1 4.8 4.4 6.3% 15.9% Up
Consumer Price Index 2008M3 82-84=100, NSA 213.5 211.7 205.4 0.9% 4.0% Up
Core CPI 2008M3 82-84=100, NSA 214.9 213.9 209.9 0.5% 2.4% Up
Employment Cost Index 2008Q1 89.06=100, SA 107.6 106.7 104.3 0.8% 3.2% Up
Productivity Index 2007Q4 92=100, SA 140.7 140.3 136.6 0.2% 3.0% Soft
Retail Sales Growth 2008M3 $billion, SA 379.093 378.462 371.829 0.2% 2.0% Weak
Auto and Truck Sales 2008M3 million, SA 15.05 15.31 16.22 -1.7% -7.2% Down
Housing Starts 2008M3 million, SA 0.947 1.075 1.491 -11.9% -36.5% Down
Real GDP Growth 2008Q1 2000$billion, SA 11,693.1 11,675.7 11,412.6 0.1% 2.5% Weak
U.S. Dollar 2008M4 97.01=100 95.476 95.770 105.300 -0.3% -9.3% Down
Trade Balance 2008M2 $billion, SA -62.321 -57.856 -57.356 7.7% 8.7% Weaker
S and P 500 2008M4 Monthly Close 1,397.40 1,322.70 1,482.37 5.6% -5.7% Off
Real Short-term Rates 2008M3 %, NSA 0.4 1.8 4.0 -78.7% -90.3% Down
Treasury Yield Spread 2008M3 %, NSA 2.2 1.6 -0.5 42.0% -528.8% Recently Up
Sources: Nevada Department of Taxation; Nevada Department of Employment, Training, and Rehabilitation; UNR Bureau of Business and Economic Research; UNLV Center for Business and Economic Research; McCarran International Airport; Reno/Tahoe International Airport; Las Vegas Convention and Visitors Authority; Reno-Sparks Convention and Visitors Authority; US Department of Commerce; US Bureau of Labor Statistics; US Census Bureau; US Federal Reserve Bank; 

Based on the Center's monthly column on business conditions statewide in the Nevada Business Journal
The Center for Business and Economic Research     University of Nevada, Las Vegas
4505 Maryland Parkway, Box 456002     Las Vegas, NV 89154-6002
(702) 895-3191     cber@unlv.nevada.edu