Real Gross Domestic Product, an inflation-adjusted measure of overall economic performance, posted a modest growth rate of 0.3 percent for the fourth quarter of 2002. This slowdown comes at the confluence of economically constrictive factors. Most important, however, the winds of war and the heightened uncertainties of geopolitical forces have kept consumers and investors wary of making big decisions, creating economic lethargy.
Since national employment levels have failed to push beyond the peak of early 2001, there has been no official declaration that the recession that began March 2001 is over. This lack of a declaration, however, has not kept some from predicting a double-dip recession. As the Iraqi conflict is winding down, uncertainties have been somewhat diminished, but not eliminated. Still, low interest rates favorable for investment spending and expansionary fiscal policy prime the economy for recovery. The expectation of lower future energy prices further supports optimism.
A weakened national economy continues to cast a shadow over Nevada’s economic future, as does general weakness in airline travel. Still, Nevada has not experienced declines in key economic indicators proportionate to what a major economic downturn might look like. Visitor volume continues to remain at or near levels of a year ago, down 0.1 percent for Clark County and 4.4 percent for Washoe County in February. These declines are indeed modest, when adjusted for the fact that the Super Bowl occurred during February of 2002 and in January this year.
The Nevada January unemployment numbers are the first released under the new NAICS (North American Industrial Classification System). As such, the sharp increases in the unemployment rates for Nevada, Las Vegas and Reno, reflective of seasonal factors among others, will bear monitoring in the months ahead. All in all, Nevada’s employment growth, a good overall measure of well-being, continues, though at slower rates than prior to 2001. Moreover, the level of employment is above the peak of the last economic expansion, which ended in March 2001.