The “second” estimate of U.S. real gross domestic product (GDP) for the second quarter of 2018 rose at an annual rate of 4.2 percent, up by 0.1 percentage point from the prior estimate. The upward revision reflected larger-than-expected business investment, including inventory investment, which was partly offset by smaller-than-expected consumer spending. Real GDP posted the fastest growth since 2014 Q3 mainly due to strong consumer spending, which probably benefited from the tax cut. U.S. nonfarm employment added 201,000 jobs in August and average hourly earnings in August gained 2.9 percent, the fastest year-over-year pace since June 2009. Retail sales in July posted a robust 6.4 percent year-over-year growth. June housing starts continued to decline, while the seasonally adjusted U.S. housing price continued to increase. The Federal Reserve will probably introduce another rate hike in December as recent employment and economic indicators remained robust. The recent uncertainty about a potential tariff war, however, may provide a significant headwind.
The Nevada economy showed generally robust economic activity based on the most recent data. Seasonally adjusted statewide employment gained 9,500 jobs in July, the largest creation of jobs in two years. July gaming revenue decreased slightly by 0.2 percent year-over-year. June taxable sales climbed by 4.1 percent from a year ago, while gasoline sales (in gallon) experienced a 0.4 percent decline over the same period.
Clark County experienced mixed signals in local economic activity. Seasonally adjusted employment added a surprising 10,300 new jobs from June to July, the largest gain since April 2005. Leisure and hospitality, construction, and professional and business services provided the main gains to new jobs in July. July visitor volume in Clark County experienced a 3.6 percent year-over-year loss, which largely reflected decreased convention attendance. Total McCarran Airport passengers rose by 2.3 percent year-over-year. Residential housing permits/units in July continued its yearly loss, down by 13.3 percent compared to a year ago.
Washoe County also posted mixed economic signals. The Reno-Sparks seasonally adjusted employment added 800 jobs from June to July, up by 3.7 percent year-over-year. July visitor volume fell by 5.9 percent year-over-year, while gross gaming revenue gained slightly by 0.3 percent during the same period. Total airport passengers exceeded the level from last year by 3.4 percent. Residential housing permits in June showed a substantial year-over-year decline of 41.0 percent mainly due to the reduced number of new multi-family residential units in Sparks.
Stephen M. Miller, Director, Jinju Lee, Economic Analyst, UNLV Center for Business and Economic Research