It has been a splendid year for the Nevada economy. Job growth for 2005 reached 5.8 percent, 7.0 percent and 3.3 percent levels for Nevada, Las Vegas and Reno, respectively. This strong picture comes at a time in which the national job growth increased modestly, up 1.5 percent. Moreover, Nevada’s strong growth in 2005 follows impressive growth in 2004, while U.S. jobs grew only modestly in 2004. Indeed, this pattern of diverging growth patterns between strong growth in Nevada and modest growth in the U.S. has held since recovery from the 2001 recession. Looking to 2006, it is hard to believe that such a strong trend will continue much longer. Still, there is every reason to believe that Nevada will continue to outpace the U.S. in job growth and record yet another year of stellar increases.
Other major Nevada indicators have moved in unison with employment. Most notably, tax and gaming revenues continue to post record-setting levels, particularly in Las Vegas. Reno, facing heavy competition for its gaming market-share, shows November gaming revenue up over 6 percent for the same month a year ago. All in all, 2005 was a great year and indications point to continued economic strength in 2006.
A first look at the national-income accounts for the fourth quarter shows a decline from the third quarter. In part, the quarterly drop was expected, given the hurricane disruptions to Gulf Coast energy facilities. Still, GDP growth remained above 3 percent for the fourth quarter on a seasonally-adjusted annual basis – a clear sign that the national expansion is strong and not likely to easily derail in 2006.
In short, the U.S. outlook for 2006 is positive, though the list of possible risks is longer than usual and weighted toward the negative side.