The U.S. economy, at least as measured by spending and income, shows clear signs of having weathered financial hubris, terrorist attacks, recession and heightened uncertainty about war. Economic expansion is underway. Conditions have not returned to the strong boom of the late 1990s. However, through the first half of 2003, things look better today than in 2001. In short, the outlook for 2004 remains one of measured expansion.
Not all economic sectors show strength. The current labor market is the weakest job recovery in the post-WWII period. The U.S. job level has changed little in the past year – up a mere 0.1 percent – and remains singularly slow to recover. Employment in manufacturing is most notably down. The current U.S. job level remains below that of March 2001.
Nevada’s job picture shines far brighter than the national condition. Over the past year, Nevada is one of only a few states to experience job growth, up 4.3 percent from a year ago, based on January data. Better job markets and the outlook for continued growth in the Silver State have fueled a strong construction sector. Taxable sales are up dramatically, a reflection of strong construction activity. Permitting activity, though subject to large month-to-month changes, continues to show record levels and is up over year-ago levels by double-digit rates for Las Vegas. Reno, going through a drop in commercial permits, shows strong housing growth, up a whopping 138.1 percent. Since red-hot residential construction activity is not sustainable over the long term, one might ask when one might expect a return to a more normal pace.
Travel and tourism, having experienced more measured rates of growth than construction, will likely experience a pickup in activity with an improving national economy. Mining, another key sector of Nevada’s economy, also faces a brightening future, with gold prices over $40 per ounce and other ore and metal prices increasing markedly with stepped-up world demand.