The “second” estimate of U.S. real gross domestic product (GDP) for the fourth quarter of 2019 matched the “advance” estimate, growing at a robust 2.1 percent annualized rate. According to more complete source data, private inventory investment was revised upward, which was offset by a downward revision of nonresidential fixed investment. Overall, consumer and government spending, net exports, and residential fixed investment contributed positively to the economic expansion, while business investment, including inventory investment, continued its downward trend for the third consecutive quarter. Retail sales in January continued to increase robustly by 4.4 percent year-over-year. Housing starts in January also continued to gain strongly by 21.4 percent from last year. Despite these solid readings, the U.S. economy faces strong headwinds with continued uncertainty due to the worldwide coronavirus (COVID-19) outbreak and the oil-price war started by Saudi Arabia, at press time. The fear of coronavirus has already spread panic to both investors and consumers. As a result, the Fed made an emergency rate cut of 0.5 percent for the first time since the Great Recession and is likely to cut another a 25-basis point in the near term.
Clark County posted mostly favorable signals in local economic activity. Seasonally adjusted employment gained 500 jobs in December. Total McCarran Airport passengers and gaming revenue in January continued to gain strongly by 6.5 and 5.1 percent, respectively, year-over-year. January visitor volume in Southern Nevada also posted a solid yearly gain of 1.9 percent. December taxable sales and gasoline sales (in gallons) climbed strongly by 11.3 and 2.7 percent, respectively, from last year. Residential housing permits/units in December, however, fell by 12.0 percent despite a substantial nationwide gain. With the continuing spread of the coronavirus, the southern Nevada’s economy will experience harsher negative effects than other areas as it largely depends on tourism.
Washoe County reported somewhat mixed economic signals. The Reno-Sparks seasonally adjusted employment added 100 jobs in December. December taxable sales for Washoe and Storey Counties experienced a large gain of 12.2 percent compared to last year, while gasoline sales declined by 0.6 percent over the same period. January visitor volume continued its year-over-year loss of 3.1 percent. January gaming revenue, however, increased strongly by 7.8 percent from last year.
Stephen M. Miller, Director
Jinju Lee, Economic Analyst
UNLV Center for Business and Economic Research
The views expressed are those of the authors and do not necessarily represent those of the University of Nevada, Las Vegas or the Nevada System of Higher Education.