Business Indicators - September 2004

Business Indicators

by R. Keith Schwer

Continued economic expansion in U.S. and world markets has put Nevada indicators in a favorable light. The Silver State’s latest unemployment rate stands at 4.4 percent, down from 5.7 percent a year ago. It is now at a level thought by many to represent a fully-employed economy. More than 48,000 jobs were created during the past 12 months; job growth was up 4.8 percent in Clark County and 4.2 percent in Washoe County, measured year-over-year. Nevada’s job outlook remains favorable, given the optimism for U.S. and world economic activity.

Construction activity has been robust. Residential permitting activity continues to signal housing expansion. Permitting activity for the month of June was up 10.6 percent for Clark County and 21.0 percent for Washoe County over year-ago levels. Though the Federal Reserve has increased the federal funds rate and is likely to continue to signal higher rates for the future, housing and construction activity will likely remain brisk for the remainder of 2004.

In the wake of the 2001 recession, Nevada public revenues stalled. The return to economic expansion has pushed public revenues up, however. State taxable sales and gaming revenue have posted double-digit growth rates, measured year-over-year, by 14.2 percent and 12.7 percent respectively.

Fiscal conditions in California might suggest that other states are still suffering a fiscal crisis. California does not fairly represent the average state, however. Indeed, economic prosperity has helped states to recover, or at least soften the states’ fiscal troubles of a few years ago. Other growing states, similar to Nevada, that rely on revenue sources that move with business cycles, have seen fiscal improvement of late as the national economy’s recent performance has picked up.

Taken as a whole, Nevada continues to outperform the U.S. economy, and during the past 12 months, Nevada’s job picture remained more favorable than elsewhere in the U.S.