The “advance” estimate for U.S. real gross domestic product (GDP) for the fourth quarter of 2017 increased at an annual rate of 2.6 percent after two consecutive quarters of above 3 percent growth. Average hourly earnings growth accelerated to 2.9 percent year-over year, its largest gain since the Great Recession thanks to a tightening labor market. Retail sales posted strong annual growth of 4.6 percent in 2017 compared to 3.0 percent in 2016. In 2017, however, auto and truck sales experienced its first annual decline of 1.7 percent in eight years. December housing starts fell by 6.0 percent year-over-year, while seasonally adjusted housing prices in the U.S. continued to gain. The Federal Reserve will probably increase the federal funds rate in March because of a possible overheating economy due to the tight labor market and the tax cut.
Nevada posted generally positive signals in economic activity based on the most recent data. Seasonally adjusted statewide employment added a surprising 7,600 jobs in December, which led to the fastest year-over-year job growth among the 50 states. Nevada population grew by 2.0 percent from 2016 to 2017, ranking as the second fastest-growing state after Idaho.
For Clark County, somewhat favorable signals emerged with the latest data. Seasonally adjusted employment added 4,700 new jobs from November to December and was up 3.1 percent year-over-year. December visitor volume for Clark County continued its year-over-year loss, down by 2.2 percent. As a result, the number of visitors decreased by 1.0 percent in 2017, which mainly reflected the temporary reduction in the number of rooms in inventory. Nevertheless, total McCarran Airport passengers rose by 3.3 percent year-over-year, which brought to Las Vegas a record-breaking 48.5 million passengers in 2017. December gaming revenue continued to decrease by 0.9 percent year-over-year but produced its largest annual total since the Great Recession. Clark County taxable sales and gasoline sales for November climbed by 3.4 and 0.8 percent, respectively, compared to last year. November residential housing permits experienced a strong gain, up by 41.1 percent from a year ago.
More favorable signals were posted for Washoe County. The Reno-Sparks seasonally adjusted employment gained 3,100 jobs from November to December and rose by 2.6 percent from last year. November taxable sales for Washoe and Storey Counties increased by 16.3 percent year-over-year. December visitor volume was up by 4.2 percent from a year ago. Residential housing permits in November continued a significant year-over-year rise, up by 72.0 percent, while commercial building permits remained low.
Stephen M. Miller, Director, Jinju Lee, Economic Analyst, UNLV Center for Business and Economic Research