The advanced estimate for U.S. real gross domestic product (GDP) for the second quarter of 2016 indicated a much weaker-than-expected growth of 1.2 percent. In addition, the first quarter’s real GDP growth was revised downward to 0.8 percent from 1.1 percent. Private investment, again, contributed negatively to U.S. economic expansion, falling by 9.7 percent from the previous quarter. Nevertheless, consumer spending, which explains two-thirds of real GDP, accelerated to 4.2 percent for the same period. The unemployment rate remained unchanged at 4.9 percent due to a higher labor participation rate from June to July, another positive sign. Retail sales climbed for the month by 0.6 percent and rose by 2.7 percent from a year ago, while auto and truck sales fell by 2.2 percent from June 2015. Housing starts declined by 2.0 percent year-over-year, while housing prices in the U.S. continued to rise in May 2016.
The Nevada economy continues to post positive signals on its economic recovery. The adjusted statewide employment gained a stunning 7,500 jobs from May to June after two consecutive months of decline.
Most recent data document strong improvement in Clark County’s economic activity. Seasonally adjusted employment added 3,300 jobs from May to June, signaling a continuing economic expansion in Clark County. Visitor volume and gaming revenue gained 4.1 and 7.3 percent year-over-year, respectively, after experiencing large yearly losses in the previous month. Total McCarran passengers increased by 5.7 percent on a year-over-year basis. Gasoline sales exceeded its level from a year earlier by 2.6 percent, while taxable sales decelerated to only a 0.5 percent growth in May compared to a year ago. Residential housing permits continued significant gains, increasing by 218 units, or 20.9 percent, from a year earlier. Commercial permits decreased by 13.8 percent from a year ago, remaining low and volatile.
Washoe County also saw favorable signals in its on-going recovery, although home building continued its contraction. The Reno-Sparks seasonally adjusted employment added 1,400 jobs for the month and rose by 3.9 percent for the year. Taxable sales continued its double-digits growth, up by 11.7 percent year-over-year, while gasoline sales increased by 2.8 percent. Gaming revenue and visitor volume rebounded from May to June, climbing by 4.1 and 9.6 percent, respectively, compared to a year ago. Residential housing permits has decreased year-over-year for three consecutive months, down by 51.2 percent compared to a year ago.
Stephen M. Miller, Director, Jinju Lee, Economic Analyst, UNLV Center for Business and Economic Research