The U.S. economy continues to show signs of weakness, with a slowing recovery in second quarter 2010. The revised estimate for real GDP growth in second quarter was 1.6 percent at an annual rate, down substantially from the 3.7 percent figure for first quarter 2010. U.S. nonfarm employment fell by 54,000 jobs in August, marking the third straight month of decline. On a more positive note, industrial production, personal income, personal consumption and retail sales all increased in July, and measures of consumer confidence and sentiment ticked up in August.
Nevada’s unemployment rate edged upward to 14.4 percent in July and remained the highest in the nation. State employment declined by 0.9 percent in July and stands 2.2 percent below a year earlier. On a brighter note, taxable sales bounced upward by 6.3 percent in June and were only 0.3 percent below a year earlier. Continuing the favorable news, visitor volume was up 5.9 percent in July and 3.9 percent above a year earlier. Gaming revenue was up 8.6 percent in July, but 4.9 percent below a year earlier.
The economic picture for Clark County is quite similar to that for the state as a whole. The Las Vegas unemployment rate rose to a new record of 14.8 percent and remains one of the highest in the nation. Clark County employment dipped by 0.7 percent in July and was 2.3 percent below a year earlier. Taxable sales rose by 3.9 percent in June, but were 1.0 percent below a year earlier. Residential-construction permits dropped in July and are 20 percent below a year earlier. Gaming revenue was up 8.3 percent in July, but 5.0 percent below a year earlier. Most favorably, visitor volume rose 7.3 percent and was 4.1 percent above a year earlier.
Economic activity in Washoe County shows a little more strength than in Clark County. The Reno-Sparks unemployment rate remained at a record high of 13.6 percent in July. Washoe County employment fell by 1.4 percent in July and was 4.1 percent below a year earlier. Taxable sales rose a robust 11.3 percent in June and were 0.3 above a year earlier. Visitor volume was down in July, but gaming revenue was up sharply.
With the national recovery showing signs of slowing, the Nevada, Clark County and Washoe County economies remain moribund. The real estate and construction sectors are likely at or near bottom, but the large overhang in residential and commercial space suggests no significant improvement is likely for quite some time. Signs of renewed strength in the leisure and hospitality industry hint that the Nevada economy may be seeing the first signs of recovery, but more likely that sector is experiencing the bumpy ride that characterizes the bottom. With monetary policy not providing much traction, a well-directed fiscal stimulus could have a significant effect on the recovery—for the United States and Nevada.