The “third” estimate for U.S. real gross domestic product (GDP) for the first quarter of 2017 implied a 1.4 percent annualized rate of growth, 0.2 percentage point higher than the “second” estimate of 1.2 percent. U.S. nonfarm employment rebounded by adding an impressive 222,000 jobs in June. Moreover, the previous two months of job gains were revised upward. The unemployment rate ticked up to 4.4 percent as the labor force participation rate rose slightly but still stayed at its 16-year low level. The Federal Reserve (Fed) raised its benchmark interest rate by 0.25 percentage point to a range of 1.00 to 1.25 percent in June, and another hike will probably happen in December. In addition, the Fed announced that it will start to shrink its $4.5 trillion balance sheet this year, which could promote hikes in mid- and long-term interest rates.
The Nevada economy posted somewhat mixed signals in its economic activity based on the most recent data. Seasonally adjusted statewide employment lost 6,500 jobs in May, but climbed 2.7 percent from last year. The unemployment rate remained unchanged at 4.7 percent. Taxable sales in April experienced a robust 4.6 percent year-over-year increase. Legalized recreational marijuana sales will add additional gains to taxable sales going forward. April gasoline sales (in gallons) increased by 3.7 percent year-over-year.
For Clark County, mixed signals also emerged with the latest data. Seasonally adjusted employment lost 1,300 jobs from April to May, mainly reflecting a 1,400 job reduction in the leisure and hospitality sector. May visitor volume for Clark County experienced a weak 0.4 percent gain year-over-year, and total McCarran passengers rose by 1.4 percent during the same period. Clark County gaming revenue for May also climbed by 3.5 percent from last year. April taxable sales and gasoline sales gained 2.8 and 4.0 percent, respectively, year-over-year. Residential housing permits and commercial permits in February decreased substantially by 58.2 and 32.6 percent, respectively, from last year.
Washoe County experienced generally positive signals in its economic activity. The Reno-Sparks seasonally adjusted employment lost 1,000 jobs in May, but was up by 2.7 percent from last year. On the positive side, taxable sales for Washoe and Storey Counties in April increased strongly by 17.9 percent from last year. May gaming revenue remained relatively flat, up by 0.3 percent year-over-year, while visitor volume climbed 5.8 percent during the same period. May residential housing permits substantially exceeded their level from last year by 155.3 percent, which reflected a remarkable jump in multi-family units in Sparks and Reno.
Stephen M. Miller, Director, Jinju Lee, Economic Analyst, UNLV Center for Business and Economic Research