The “third” estimate of U.S. real gross domestic product (GDP) for the third quarter of 2021 equaled 2.3 percent at an annual rate, which was revised up by 0.2 percent from the prior estimate. The revision largely reflected upward adjustments in consumer spending and private inventory investment. Overall, the lower growth rate in the third quarter was primarily caused by a deceleration in consumer spending due to the resurgence of coronavirus cases as well as goods and labor supply shortages. U.S. nonfarm employment continued a weaker-than-expected gain, adding 199,000 jobs in December, its lowest gain since a loss in December 2020. In 2021 nearly 6.5 million additional workers returned to the workforce. A positive sign but the economy is still short 3.5 million nonfarm workers compared to February 2020. The most recent data indicate that the U.S. economy will continue its expansion, but at a slower pace. Moreover, the combination of the Omicron variant, continued supply shortages, higher inflation, and a reduction in government fiscal support poses probable headwinds. The Federal Reserve announced that it will end its asset purchases by March, three possible rate hikes in 2022, as well as a potential reduction of its balance sheet to dampen inflation.
Clark County displayed generally favorable signs in its local economic activity. Seasonally adjusted employment gained only 1,700 jobs in November. November gaming revenue surged by 9.8 percent month-over-month despite an 8.2 percent drop in visitor volume from October. Total airport passengers for November declined by 4.6 percent from last month after a strong month-over-month gain of 10.7 percent in October. October taxable sales rose strongly by 22.7 percent from two years ago. November residential permits gained 38.3 percent from last month, adding 1,732 units, the highest level since May 2016 amid the high demand in the local housing market. According to the Greater Las Vegas Realtors Association, southern Nevada posted the record-high total number of existing homes sales in 2021.
Washoe County also exhibited generally favorable signals in its local economic activity. The Reno-Sparks seasonally adjusted employment lost 1,300 jobs in November, but the unemployment rate fell by 0.3 percent to 3.7 percent. October taxable sales climbed by 30.0 percent from two years ago. November air passengers jumped by 117.4 percent year-over-year and surpassed its level from two years ago by 1.7 percent. November gaming revenue also increased substantially by 19.9 percent from two years ago, while visitor volume remained 5.2 percent lower over the same period. November residential permits were up by 17.7 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.