The cloud of uncertainty that thwarted economic expansion during the early months of 2003 has not faded. Geopolitical events continue to unfold in a manner creating uncertainty. The Iraqi war is over, but peace and prosperity remain illusive in the fractious Middle East. Political and economic turmoil continue. These uncertainties have not pushed the economy into a further contraction, but they have constrained growth such that the recession, which began in March 2001, has not been officially declared over.
The major industrial countries buying sizable volumes of U.S. goods and services – for example, Japan and Germany – show marked signs of weakness. Furthermore, almost no one expects a quick rebound. Other international factors, namely terrorism and SARS, cast a further chill across the economic horizon. As such, weaknesses seem to outnumber strengths. All in all, modest expansion will likely occur for the U.S. and Nevada in the near term.
For April, the U.S. employment level remained essentially unchanged over the previous month and down 0.3 percent from a year ago. Employment levels in Nevada showed only modest change, up 0.7 percent from the previous month and 1.9 percent above year-ago levels. Over the same periods, the corresponding numbers were 0.7 percent and 2.1 percent for Clark County (Las Vegas) and 0.6 percent and 1.1 percent for Washoe County (Reno). Without marked improvement in the employment trend, economic growth will remain tepid at best.
Nevada’s tourism-based economy showed mixed results most recently. Some indicators reached favorable levels. For example, Nevada gaming revenues for March reached 3.4 percent above year-ago levels and taxable sales were 4.9 percent above year-ago levels. Still, one month’s bump up does not represent a trend. And, as a result, the length of uncertainties at this time constrains the optimism that otherwise might be in place after completion of a short and successful military campaign.