The Silver State’s conditions have deteriorated rapidly. Just a year ago the jobless rate was 5.9, 5.6, and 6.6 percent for Nevada, Las Vegas, and Reno, respectively. A year later the rates exceed 10 percent—meaning a bad recession for the Silver State and its major urban areas. National conditions do not offer much encouragement—consumers now spend less, believing that an uncertain future requires less consumption and more saving. Further declines in the fortunes of the Silver State seem imminent—rising job losses predicts further difficulties ahead.
Not only have we seen sharp declines in discretionary spending such as travel and tourism, but sales of big ticket items such as automobiles have also decline brusquely. Automobile sales are down by more than 40 percent measured year-over-year. We have recently seen a large national stimulus package enacted and a helping hand to households to buy a home and keep homeowners facing economic difficulties remain in their homes. Further action will be needed to get credit markets unstuck, however. Meanwhile, Nevadans wait for help to arrive. The recession will pass and economic recovery will bring new prospects, for sure, but the severity of the current downturn offers little hope that this will be a quick recovery.
All indicators except the unemployment rate declined year-over-year for Nevada, Clark County (Las Vegas), Washoe (Reno); and, the unemployment rate rose for all three of the Nevada reporting areas. Some improvements measured from December to January appear in the data, but these improvements are not seasonally adjusted. Some indicators have reached new lows. Most notably, residential permits declined to 203 for Clark County and 38 for Washoe County—showing levels suggestive of needed corrections to get rid of excess housing units. Housing remains a national problem, down more than 50 percent. Still, Nevada is one of four states where the excesses were the greatest. As a result, it is hard to foresee substantial improvement in Las Vegas or Reno without recovery in housing.
Nevada tourism continues its downward spiral. Nevada gaming revenue is down 18.9 percent in a year, while taxable sales are down 16.2 percent. Visitor volume is down by 11.5 percent—showing that those that are coming to Nevada are spending less. The percentage declines are greater for Reno than Las Vegas, while the dollar declines are greater for Las Vegas than Reno. All in all, tourism will need to improve before one sees improvement in the Silver State.