The U.S. economy continues to show signs of slow recovery from its deep recession. For third quarter, estimated real GDP growth was 2.0 percent at an annualized rate, up slightly from the 1.7 percent figure for second quarter 2010. U.S. nonfarm employment rose by 151,000 jobs (seasonally adjusted) in October, marking the first month of increase after four consecutive months of decline. In addition, real personal consumption, consumer confidence and retail sales all increased in October. On a less positive note, the Kansas City Financial Stress Index edged above its long-run average in October—indicating that financial turmoil still dogs the U.S. economy.
With U.S. consumption spending rising, the Nevada economy may be showing stuttering steps of recovery. September gaming revenue was up only 0.7 percent above a year earlier—and down 2.8 percent from August. September visitor volume and taxable sales were also higher than a year earlier. A lagging indicator of economic activity, the state unemployment rate rose from 14.2 percent to 14.5 percent in September.
The economic picture for Clark County is improving a little bit more than for the State as a whole. September gaming revenue was up 1.5 percent from a year ago—down 2.5 percent from a very robust August. Had August not seen such a dramatic increase in baccarat, however, the September gaming numbers would show an increase. September visitor volume and taxable sales were also up over a year earlier. The Las Vegas unemployment rate rose from 14.7 percent to 15.0 percent in September, and residential construction permits fell sharply.
Economic activity in Washoe County showed a little more weakness. The Reno-Sparks unemployment rate rose from 13.3 percent to 13.6 percent in September. Taxable sales, gaming revenue and visitor volume were all lower than a year earlier.
With the national recovery showing continued signs of reinvigoration, the Nevada and Clark County economies—particularly the leisure and hospitality sectors—seem to be showing stuttering signs of improvement. The real estate and construction sectors are likely at or near bottom, but the large overhang in residential and commercial space suggests no significant improvement is likely for quite some time. Given the lingering issues in the financial sector and the reluctance of businesses to invest, the U.S. economy is likely to continue on a slow upward path, which suggests a slow recovery for the Nevada economy. A well-directed and timely fiscal stimulus could give the U.S. and Nevada economies a significant boost.
