Business Indicators - October 2003

Business Indicators

by R. Keith Schwer

Having bottomed out, the Nevada and U.S. economies are now expanding. Indeed, after some period of indecision, the arbitrators of the dating of U.S. business cycles declared that the recession ended in November 2002. The expansion that followed has, however, been modest by historical standards.

The U.S. expansion in 2002 and 2003 has been so weak that concerns have alternated between discussion of another recession (referred to as a "second dip"), risk of serious deflation (a reason for keeping interest rates at levels not seen since the 1960s) and the lack of marked improvement in the employment picture (termed the "jobless recovery" in the press).

July employment is below the level of a year ago, down 0.3 percent and the recent unemployment rate is at 6.2 percent. All in all, the U.S. economy continues to search for traction.

The Nevada economy, at least as measured by employment level, has performed better than the U.S. economy, and Nevada is one of only a few states that have had employment growth in excess of 1 percent. Growth in employment, measured for June 2003 over June 2002, was up 1.6 percent, 2.0 percent and 1.0 percent, respectively, for Nevada, the Las Vegas Metro Area and the Reno Metro Area. Current employment in the Silver State stands above the level of March 2001, the date of the end of the previous expansion, whereas the U.S. employment level has not recovered to the level of the previous peak.

Gaming revenue, one of the better indicators of the vitality of the travel and tourism sectors of the Nevada economy, posted strong growth in June, up 13.3 percent and 16.8 percent, respectively, for Nevada and Clark County, but down 1.2 percent for Washoe County. The state of Nevada closed out the 2003 fiscal year with gaming-revenue growth in excess of 2.8 percent. Continuation of last month’s relatively good growth will surely require stronger overall performance of the U.S. economy.