The U.S. economy continues to show mixed signs of recovery from its deep recession. For the second quarter, the final estimate for real GDP growth was 1.7 percent at an annual rate, down from the 3.7 percent figure for first quarter 2010. U.S. nonfarm employment fell by 95,000 jobs in August, marking the fourth straight month of decline. In a more positive direction, the Kansas City Financial Stress Index edged down in September, remaining below its long-run average for the second straight month. In addition, industrial production, real disposable personal income, real personal consumption, consumer confidence and retail sales all increased in August.
With U.S. disposable income and consumption rising, the Nevada economy may be showing initial signs of recovery. Gaming revenue was up a robust 13.8 percent in August and 11.5 percent above a year earlier. August visitor volume and taxable sales were also higher than a year earlier. The state unemployment rate also edged downward to 14.2 percent in August as labor force participation fell.
The economic picture for Clark County is quite similar to that for the state as a whole. Gaming revenue was up 16.3 percent in August, and 13.8 percent above a year earlier. August visitor volume and taxable sales were also up strongly over a year earlier. The Las Vegas unemployment rate fell slightly to 14.7 percent in August. Residential-construction permits edged downward in August.
Economic activity in Washoe County shows more mixed signs of improvement. The Reno-Sparks unemployment rate fell to 13.3 percent in August and August taxable sales were higher than a year earlier. In contrast, August gaming and visitor volume were less than a year earlier.
With the national recovery showing some signs of reinvigoration, the Nevada and Clark County economies—particularly the leisure and hospitality sectors—seem to be showing 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. If the U.S. economy continues to show progress, the Nevada economy could be in recovery. Nonetheless, a well-directed fiscal stimulus could provide a significant boost to economic activity—for the United States and Nevada.
