The U.S. economy is showing signs of slowing growth. Revised data show U.S. real GDP grew at an annualized rate of 1.9 percent during first quarter 2012, which represents a substantial slowing from the fourth-quarter rate of 3.0 percent. Business fixed investment, residential investment and inventories also made positive contributions. Government spending and net exports made negative contributions. U.S. nonfarm employment rose by only 69,000 jobs in May, marking the weakest gain since May 2011. Housing prices stabilized and sales of both new and existing homes rose in April. Consumer sentiment increased slightly in May, but consumer confidence slipped. The Kansas City Financial Stress Index rose to just about its long-run average in May, which suggests financial headwinds are not impeding economic growth.
The Nevada economy also shows some evidence of slowing. Seasonally adjusted, statewide employment decreased by 600 jobs (0.1 percent) from March to April. The Nevada unemployment rate decreased from 12.0 percent in March to 11.7 percent in April as the result of reduced labor force participation. Visitor volume was 1.2 percent lower in April than a year earlier. Nonetheless, gaming revenue was 6.2 percent higher in April than a year earlier. Taxable sales were 7.2 percent higher in March than a year earlier.
Clark County’s economy also shows signs of slowing. The Las Vegas unemployment rate fell from 12.6 percent in March to 12.4 percent in April. Compared to a year earlier, visitor volume was down by 1.2 percent in April. Nonetheless, gaming revenue was 8.9 percent higher in April than a year earlier. Taxable sales for March were only 1.9 percent above those for a year earlier. Residential construction permits slipped in April after rising sharply in March. Commercial construction permits dropped to a very low level.
Washoe County also shows slowing economic growth. Seasonally adjusted, Reno-Sparks employment fell by 1,300 jobs (0.7 percent) from March to April. The Reno-Sparks unemployment rate fell from 11.7 percent in March to 11.5 in April. Compared to a year earlier, April visitor volume was down by 1.2 percent. Gaming revenues were down by 15.5 percent over the same period. Residential construction permits rose sharply in April, and commercial construction permits fell to extremely low levels.
The pace of national economic growth slipped during first quarter, and a number of signs—such as employment and the pace of spending—point to relatively weak economic growth in the second quarter.
Professor Stephen P.A. Brown, PhD
UNLV Center for Business and Economic Research
