Business Indicators
by R. Keith Schwer
The midyear indicators remain generally positive. To be sure, a number of indicators point to slowing rates of change. And a few, in particular housing, generally show marked weakness in comparison with indicators in 2005 and early 2006.
One indicator showed a big jump. Las Vegas residential permitting jumped from 925 in July to 2,388 in August; a one-month increase in excess of 158 percent. All indications suggest this is not a permanent trend.
The Fed surprised investors in September with a marked drop in the federal funds rate by 50 basis points to 4.25 percent and the discount rate by 50 basis points to 5.25 percent. This activity follows clear recognition of possible adversities evolving in housing and associated credit markets.
In Nevada, housing imbalances have taken the bloom off the current expansion path. Still, strong spending activity in other sectors has kept the economy from slipping into a downturn. In particular, taxable sales, gaming revenue, and tourism activity have kept Las Vegas (Clark County) and Reno (Washoe County) afloat. Changes, even if negative, suggest strength in the face of sharp slowdowns in residential construction.
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