We find no doubt that the U.S. and Nevada economies are in a slowdown and that economic performance should be sub-par for at least the first half of 2008. Some second-half improvement is expected with federal tax rebate checks giving households more money to spend.
Economic weakness shows in the job numbers. U.S. job growth has turned negative since January. March’s U.S. employment level is down 80,000 jobs, a decline of 0.1 percent. The unemployment rate is now 5.1 percent. Because the official unemployment rate excludes some people, alternative measures that include marginally attached workers are used. Marginally attached workers include discouraged workers who have left the work force and part-time workers. This broader measure, identified as U-6, suggests weaker labor utilization, that is, unemployment broadly defined at more than 8 percent.
Nevada’s job level is more optimistic than the national rate, at least for the level of jobs. Job growth has been positive, but only marginally so. Recent job growth is 0.5 percent, 0.5 percent and 0.7 percent for Nevada, Clark County (Las Vegas), and Washoe County (Reno) respectively. On the other hand, the unemployment rates in the Silver State exceed the official national rate. Without state and regional broader measures of labor utilization, some of the difference between Nevada conditions and elsewhere may remain not be as clear as we might wish. Still, the job picture suggests that the U.S. and Silver State economies are slouching toward mediocre economic performance for 2008.
The housing and credit crunches have spilled over into other economic sectors, amplifying the economic bumps. For example, Nevada taxable sales continue along a downward slide, down 4.9 percent for the same month a year ago. Gaming revenue, another key general revenue source for Nevada, posted a 3.9 percent decline last month and 4.7 percent decline the month before (same month year-over-year). These revenue declines spawn public-spending cuts, further contracting overall spending. And, of course, higher fuel prices and other inflated prices also leave consumers with less discretionary spending.
