Having some key indicators post double-digit growth, for example, gross gaming revenue, has been welcome news for Nevada’s gaming and tourism economy. August numbers reveal a strong 11.28 percent increase measured year-overyear for the state. The Las Vegas Metro Area, Clark County, having increased room capacity about 10 percent, recorded a strong increase of 13.92 percent. Meanwhile, Reno (Washoe County) also enjoyed a strong summer season with an August increase of 6.51 percent. Strong growth in Nevada gaming revenue in the face of the continued spread of gaming bodes well for the future, though, of course, no one believes that the forces of competition Nevada faces will lessen in the future.
Precious mineral prices, having trended downward for sometime, show signs of reversal as international bank holdings shifted. Though Nevada has long held a cost advantage in mining, the growth in supply relative to demand has depressed Nevada’s mining sector, the key economic sector of the state’s rural communities. The break in the downward price slide, though not a rebound to past levels, was surely welcomed.
Other Nevada indicators point to continued economic expansion. The state’s unemployment rate remained at 4.3 percent. Indeed, pockets of labor shortages remain, further signaling the robustness of the current expansion. lmproved Asian economies could also help increase the state’s tourism sectors in the future.
The strength of the national economy has reached a point of concern, at least for Federal Reserve (Fed) policymakers. Concern has passed levels for the Fed to act, and they have twice nudged short-term interest rates up. Hoping to sustain expansion, the Fed has signaled concern for inflation. The watch for inflation will center on two key price indicators- the consumer and producer price indexes. The first signs of economic adjustment are likely to be associated with stock prices. Fed Chairman Greenspan has on more than one occasion during the past year expressed concerns for exuberance in stock prices.
R. KEITH SCHWER, UNLV
Center for Business & Economic Research
