With rising interest rates by the Federal Reserve, there have been concerns about this leading Southern Nevada into a possible recession. CBER’s director, Andrew Woods was recently featured on the show Nevada Week that aired on Vegas PBS. The segment discusses the idea and thoughts of another possible recession and highlights the topic of average consumer spending in Nevada, and our state’s current housing market.
There are projections of a looming national recession and yet Andrew Woods of UNLV’s Center for Business and Economic Research projects that Clark County’s population is projected to grow this year by 52,000 people. Woods told Nevada Public Radio State of Nevada Host Joe Schoenmann today that 2022 was a story about the resiliency of the American consumer, and 2023 will be judged based on the resiliency of American business.
“Worker trends haven’t changed,” Miller said. “The problem is not so much tipping– it’s inflation,” Miller said, noting that businesses may lower base pay to cut overhead, and expect consumers to tip. Miller said studies show that Americans will tip as a cultural norm, no matter the level of service.
“We’re back to the pre-Great Recession scenario. People are retiring in California, and they have a lot of their wealth tied up in equity. They sell their house, they move here, or to Salt Lake or to Phoenix. They buy a house maybe not be quite as grandiose as they had or is a reasonable facsimile their house in California. And they still have a lot of money left over,” Miller said.
“Interest rates have gone up. And we know that we know that prices are going up as well. And that’s what the Fed is trying to get their hands around and solve. So it may be that the Fed’s policies is having an effect not only nationally, but it’s also affecting our economy locally,” said Professor Stephen Miller, one of the authors of the study.
According to a group of UNLV economic researchers, Las Vegas isn’t out of the pandemic woods yet. In fact, they said, visitation is likely to dip in 2023 and 2024, in accordance with an expected softening in the US economy. The group – which first announced its findings in April and reiterated them at a UNLV forum two weeks ago – predicts that visitation is likely to drop by about a million people next year, to between 37 million and 38 million.
At UNLV’s Center for Business and Economic Research (CBER), director Andrew Woods cuts to the bottom line. “The demand for energy storage between electric cars, homes, and commercial is only going to grow exponentially,” Woods says. “The demand for batteries is forecasted to grow five times in the next eight years. Climate change is no longer a question of mitigation, but of human survival.”
Andrew Woods, director of the Center for Business and Economic Research at UNLV, said he was encouraged by the growing labor participation rate. He said increasing the participation rate to pre-pandemic levels — near 64 percent according to the BLS — was most important to recovery and the state’s economic growth.
“In the short-run, it’s not surprising to see that we’re still the highest unemployment rate, with transient workers and still a lot of job openings in our largest sector,” Woods said. “What I think is more concerning is what happened to (the workers) that should still be in the workforce?”
The university’s Center for Business and Economic Research, or CBER, found that Nevada has experienced what it calls a “broke-V” recovery, according to its fall economic outlook report.
“We are not in a recession yet,” Andrew Woods, director of CBER, said in a news release. “But an economic slowdown is in the cards for 2023.”
As for why the housing market may experience a downturn, Andrew Woods, the director of CBER, pointed to the rapid rise in home prices following the brief pandemic recession.
“You should remember housing prices between 2020 and 2022 went up first 27 percent, and then they went up 17 percent,” Woods said during the Outlook presentation. “That’s pretty incredible. So the model’s looking at that and saying, ‘That’s maybe not sustainable for the moment and there’s a little bit of a correction.”