The “third” estimate of U.S. real gross domestic product (GDP) for the first quarter of 2020 contracted by 5.0 percent at an annual rate. The decrease in real GDP was mainly caused by massive shutdowns to contain the coronavirus. U.S. nonfarm employment experienced a stronger-than-expected rebound, adding 4.8 million jobs in June, largely benefitting from a sharp increase of 2.1 million jobs in the leisure and hospitality sector. The unemployment rate declined to 11.1 percent from 13.3 percent. These improvements reflected the resumption of economic activity after the mandated lockdowns due to COVID-19. Retail sales in May recovered substantially, up by 17.7 percent month-over-month thanks to the CARES act. Housing starts in May declined by 23.2 percent year-over-year, due partly to stay-at-home orders. Despite the most recent optimistic readings, the U.S. economic outlook remains uncertain.
Nevada continued to report substantially lower levels in its economic activity. Seasonally adjusted statewide employment regained 32,000 jobs in May but still stands 17.3 percent lower than last year’s level. May gaming revenue and air passengers plummeted by 99.4 and 91.2 percent, respectively. April taxable sales and gasoline sales (in gallons) also decreased significantly by 29.1 and 43.2 percent from a year ago.
Clark County also posted highly unfavorable signals in local economic activity. Seasonally adjusted employment added 20,900 jobs in May but remains 21.3 percent lower year-over-year. Total McCarran Airport passengers and visitor volume in May plummeted significantly by 91.5 and 95.9 percent, respectively. May gaming revenue also continued to experience a substantial loss of 99.3 percent over the previous year. The recent coronavirus case surge could severely hamper the recovery of Clark County’s tourism-dependent economy. Housing permits in May continued to show better performance despite the stay-at-home order, only decreasing by 31.3 percent year-over-year.
Washoe County reported less reduction in local economic activity compared to Clark County, benefitting from its more diversified economy. The Reno-Sparks seasonally adjusted employment gained 5,900 jobs in May. The unemployment rate fell to 16.3 percent, much lower than the 29.3 percent in Clark County. April taxable sales only decreased by 13.9 percent from last year due to its lower dependency on the tourism sector compared to Clark County.
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.