The “second” estimate of U.S. real gross domestic product (GDP) for the third quarter of 2018 increased at an annual rate of 3.5 percent. Based on more complete data compared to last month, business investment, including inventory investment, was revised upward, which was offset by smaller estimates of consumer and state and local government spending growth. The overall picture of economic growth remained the same. Nonetheless, robust consumer spending and business inventory investment, which was boosted by the recent tax cut, mainly contributed to the strong economic expansion in the third quarter. Government spending also positively affected real GDP growth, while residential investment and net exports contributed negatively. The recent narrowing yield spread between 10- and 2-year bonds and uncertainty about a trade war with China caused stock market gyrations with a fear of a possible recession. The Federal Reserve Chairman, Jerome Powell, indicated that the federal funds rates may be near its neutral level and hinted that the Fed may slow the pace of interest rate hikes in 2019.
The Nevada economy exhibited highly favorable economic activity based on the most recent data. Seasonally adjusted statewide employment gained a robust 5,100 jobs in October.
Clark County showed improved signals in its economic activity compared to last month. The unemployment rate declined to 4.5 percent. October visitor volume in Clark County rose by 1.6 percent year-over-year. October gross gaming revenue jumped by 8.4 percent from last year, the largest amount since February 2013. Total McCarran Airport passengers climbed by 2.2 percent year-over-year. September taxable sales continued its robust gain of 4.4 percent year-over-year, while gasoline sales rose by 1.9 percent during the same period. Residential housing permits/units in October rebounded significantly, up by 20.4 percent year-over-year after the fourth straight month of year-over-year decreases.
Washoe County posted generally mixed economic signals. The unemployment rate dropped to 3.5 percent. September taxable sales for Washoe and Storey Counties continued its contraction, down by 8.7 percent year-over-year due to a weaker performance in Storey County. October visitor volume fell by 5.9 percent year-over-year, and gaming revenue also declined 1.3 percent over the same period. Total airport passengers exceeded the level from last year by 3.3 percent. Residential housing permits in October experienced a loss of 19.9 percent from a year ago.
Stephen M. Miller, Director, Jinju Lee, Economic Analyst, UNLV Center for Business and Economic Research