The “advance” estimate of U.S. real gross domestic product (GDP) for the second quarter of 2020 plummeted by 32.9 percent at an annual rate. The substantial contraction in real GDP reflected “stay-at-home” orders to contain COVID-19. Specifically, decreases in consumer spending, nonresidential and residential fixed investment, state and local government spending and private inventory investment contributed negatively on the real GDP growth, which was partly offset by positive contributions from federal government spending and net exports. U.S. nonfarm employment experienced a slightly stronger-than-expected rebound, adding 1.8 million jobs in July, largely benefitting from an increase of 592 thousand jobs in the leisure and hospitality sector. Retail sales in June posted a strong jump, up by 7.5 month-over-month and 1.1 percent year-over-year, boosted by the CARES act. Housing starts in June only fell by 4.0 percent from last year partly due to all-time low mortgage rates. The U.S. economic outlook, nevertheless, remains highly uncertain due to renewed restrictions to prevent an overwhelmed healthcare system crisis, which deters the speed of the economic recovery.
Clark County posted highly unfavorable signals in local economic activity despite strong monthly rebounds. Seasonally adjusted employment added 73,600 jobs in June thanks to a considerable pick-up of 42,800 jobs in the leisure and hospitality sector. Total McCarran Airport passengers and visitor volume in June still posted substantially lower levels compared to last year, down by 76.6 and 68.5 percent, respectively, in spite of the resumption of casino operations. June gaming revenue gained substantially from last month but declined by 51.4 percent from last year. Clark County could see a slower recovery due to the retrenched reopening plan caused by the resurgence of COVID-19 cases. Residential housing permits/units in June posted a year-over-year decrease of 42.5 percent.
Washoe County exhibited a stronger pick-up in local economic activity, benefitting from its more diversified economy. The Reno-Sparks seasonally adjusted employment gained 10,400 jobs in June and remained only 7.5 percent lower than last year’ level. May taxable sales recovered strongly, remaining only 1.6 percent lower than its level from last year despite a significant 22.3 percent loss in gasoline sales. June gaming revenue also displayed a substantial monthly rebound, resulting in only 6.8 percent decline 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.