The “third” estimate of U.S. real gross domestic product (GDP) for the second quarter of 2020 plummeted 31.4 percent at an annual rate, slightly better than the second estimate of a 31.7 percent annual contraction. The small upward revision reflected a smaller decline in consumer spending, which was partly offset by larger-than-expected decrease in exports and nonresidential fixed investment. Overall, the worst-ever contraction in real GDP was caused by the mandated “stay-at-home” orders to mitigate the spread of COVID-19. The slowdown of labor market recovery will probably continue with mass layoffs looming in airlines and theme parks. Retail sales in August continued its monthly and yearly gains thanks to the CARES Act. Housing starts in August also continued to rise by 2.8 percent year-over-year, partly thanks to all-time low mortgage rates. The U.S. economic outlook, however, remains highly uncertain as the COIVD-19 pandemic and political uncertainties remain.
Nevada continued to show a pick-up in its economic activity based on the most recent monthly data. The unemployment rate fell by 1.0 percent to 13.2 percent. August gaming revenue still posted a double-digit contraction of 22.1 percent from last year, while air passengers exhibited a much slower recovery with a 60.7 percent loss over the same period. Nevada personal income in the second quarter surged to the fourth fastest growth among states, up by 15.6 percent from a year ago, boosted by supplemental unemployment benefits.
Clark County posted improved signals in local economic activity but still saw a slower recovery due to its tourism-dependent economy. The unemployment rate in August declined to 15.4 percent. Total McCarran Airport passengers and visitor volume in August improved compared to last month, but still experienced substantial yearly decreases of 60.8 and 57.2 percent, respectively. August gaming revenue was down by 25.1 percent year-over-year but increased by 2.1 percent when excluding casinos in the Las Vegas Strip. July taxable sales only contracted by 9.0 percent compared to a year ago despite a remarkable loss in visitor volume. Residential housing permits/units in August also posted a year-over-year increase of 8.5 percent.
Washoe County exhibited stronger monthly and annual pick-ups in local economic activity, benefitting from its more diversified economy. The unemployment rate fell to 7.5 percent. July taxable sales continued to post a year-over-year growth of 5.4 percent, while gasoline sales (in gallons) contracted 5.5 percent during the same period. August residential housing permits/units also climbed by 4.9 percent 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.