The “advance” estimate of U.S. real gross domestic product (GDP) for the fourth quarter of 2020 increased 4.0 percent at an annual rate, after a best-ever gain of 33.4 percent in the third quarter. Personal consumption expenditure and business investment, including private inventory, contributed positively to the real GDP growth, while net exports and government spending contributed negatively to growth. Despite a strong recovery for the last two quarters, real GDP shrank 3.5 percent in 2020 due to the effects of early spring government mandated lockdowns caused by COVID-19. The unemployment rate fell by 0.4 percent to 6.3 percent partly due to declined labor participation. Retail sales in December decreased for the second consecutive month but exhibited a 2.9 percent gain over last year’s level. Housing starts in December continued its robust growth, up by 5.2 percent from last year.
Nevada’s economic activity posted mixed signals based on the most recent monthly data. Seasonally adjusted statewide employment gained a robust 8,200 jobs in December. December air passengers and gaming revenue experienced considerable month-over-month losses due to new restrictions caused by the surge in COVID cases. November taxable sales, however, only decreased by 1.2 percent from last month, which resulted in a 4.7 percent year-over-year loss.
Clark County also displayed mixed signals in local economic activity. Las Vegas still saw the worst-ever decline of 10.3 percent in monthly average employment growth from 2019 to 2020 due to the pandemic. The unemployment rate in December declined from 12.0 to 10.5 percent but remained the highest among large metropolitan areas. Total McCarran Airport passengers and visitor volume in December continued to plummet year-over-year by 60.7 and 64.4 percent, respectively. December gaming revenue also showed a double-digit loss of 39.4 percent from a year ago. Residential housing permits/units in December continued its substantial gain of 101.3 percent year-over-year because of the strong housing market with all-time low mortgage rates.
Washoe County exhibited stronger pick-ups in local economic activity compared to Clark County due to its more diversified economy. The unemployment rate fell to 5.6 percent and November taxable sales continued its strong year-over-year growth of 8.8 percent. November gasoline sales in gallons, nonetheless, dropped by 10.2 percent from a year ago. December residential permits/units were also down by 16.9 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.