The “third” estimate of U.S. real gross domestic product (GDP) for the fourth quarter of 2019 rose at an annual rate of 2.1 percent. U.S. nonfarm employment lost 701,000 jobs in March with a notable decline of 459,000 jobs in the leisure and hospitality sector. Since these figures are based on the first two weeks of March, they only reflected the early effects of the coronavirus (Coivid-19) pandemic. The U.S. economy, however, faces another recession due to the worsening coronavirus pandemic. Weekly unemployment claims soared from 282 thousand for the week ending March 14 to 3.31 and 6.65 million, respectively, for the weeks ending March 21 and 28 because of layoffs and furloughs due to stay-at-home or lockdown orders caused by Covid-19. The Fed cut interest rates to near zero and started aggressive quantitative easing by buying long-term assets to prevent the economy from sinking into a recession. The 2.3 billion stimulus package, the largest amount in history, also passed Congress and was signed by the President to address the economic downturn due to Covid-19.
The Nevada economy experienced generally positive signals with the release of the most recent data. These robust readings, however, will turn dramatically negative as Nevada closed nonessential businesses in the middle of March in response to Covid-19.
Clark County posted somewhat mixed signals in local economic activity. Seasonally adjusted employment lost 1,300 jobs in February. Total McCarran Airport passengers and visitor volume in February continued their solid year-over-year gains, up by 6.4 and 4.1 percent, respectively. January taxable sales rose strongly by 6.2 percent from last year. Residential housing permits/units in January continued to fall by 17.5 percent despite a substantial nationwide gain. Clark County currently experiences a severe economic downturn due to Covid-19, as all the casinos closed as a result of the Governor’s nonessential business shutdown and stayat-home orders. According to the Las Vegas Convention and Visitors Authority, 41.9 percent of all private employment in southern Nevada depends on the tourism industry, which bodes badly for April data.
Washoe County reported highly positive economic signals. The Reno-Sparks seasonally adjusted employment added 200 jobs in February. January taxable sales for Washoe and Storey Counties climbed by 2.6 percent yearover-year. February visitor volume and gaming revenue experienced significant growth of 15.3 and 27.1 percent, respectively, year-over-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.