The U.S. economy appears to be gaining momentum. The most recent estimate of real GDP growth for fourth quarter 2010 was 3.1 percent at an annualized rate—considerably stronger than the 2.6 percent figure posted for third quarter 2010. U.S. nonfarm employment rose by a robust 216,000 jobs (seasonally adjusted) in March, marking the sixth straight month of job increases. In addition, retail sales and real personal consumption spending continued to rise in February. On a less positive note, sales of new homes continued to slide downward in February. Sales of existing homes also fell in February after three straight monthly increases. Consumer confidence fell in March, following two months of gains.
With U.S. consumption spending continuing to grow, the Nevada economy shows uneven signs of recovery. In January and February, visitor volume was higher than a year earlier, and that followed gains in the second half of 2010. February gaming revenues were down 6.8 percent below a year earlier—largely because February 2010 saw a surge in baccarat revenues that was not repeated in February 2011. Nevada employment rose by 5,500 jobs (0.5 percent) in February, but the unemployment rate ticked up to 13.6.
The Clark County economic picture continues to improve. February visitor volume was 0.5 percent above a year earlier. Excluding baccarat, February gaming revenues were 1.0 percent above a year earlier. Because baccarat revenues surged in February 2010, however, total gaming revenues were 7.0 percent lower in February 2011 than in the same month a year earlier. In January, taxable sales were 6 percent above those for the same month a year earlier. Residential construction permits continued to rise through March, and Las Vegas employment rose by 3,500 jobs (0.4 percent) in February. The Las Vegas unemployment rate held steady at 13.7 percent.
Washoe County economic activity seems to be mixed in early 2011. In February, visitor volume was 2.1 percent below a year earlier. Gaming revenues fell by 2.7 percent in February, and were 8.6 percent below a year earlier. Residential construction permits continued rising in March, and employment rose by 1,100 jobs (0.6 percent) in February. The Reno-Sparks unemployment rate fell to 13.2 percent.
With the national economy picking up, the Nevada economy is showing modest signs of recovery. An accelerating national economy and the increasing willingness of U.S. businesses to hire could boost consumer spending and help stimulate economic growth in Nevada. Despite concerns that rising fuel prices will slow the national economy and reduce discretionary spending, most of the news from Nevada’s tourism, gaming and hospitality sectors remains moderately favorable. Nevada real estate and construction are also showing some signs of life.
Professor Stephen P. A. Brown, PhD
UNLV Center for Business and Economic Research