NEVADA ECONOMY: Jobless total drops in April; some say bottom nearing - Business

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May. 23, 2009
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NEVADA ECONOMY: Jobless total drops in April; some say bottom nearing

Las Vegas unemployment steady

By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL

Gweynette Isome, left, who moved from Columbus, Ohio, to Las Vegas in search of a job, interviews with Genevieve Rojo of Holiday Systems International during a job fair at Texas Station in April.
Photo by K.M. Cannon.

State unemployment data went in two directions in April, with the number of jobless Nevadans dropping even as the percentage of unemployed residents rose.

The uneven performance gave Nevada a one-month break from the bigger unemployment spikes of recent months. But economists at the state's Department of Employment, Training & Rehabilitation say it's too early to call an end to the downturn, and they expect several factors to push statewide unemployment to a high of 11.5 percent by early 2010.

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"If you look at both the number of unemployed and the unemployment rate, they suggest the labor market moved sideways in April," said Bill Anderson, chief economist for the employment department. "If we see another month or two of sideways movement in various indicators, that will suggest to us we are approaching the bottom of this downturn. These trends, taken as a whole, could be a first, very tentative sign that the rate of our deterioration may be moderating."

Added Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas: "Interpreting (new numbers) as a fundamental shift in the economy would probably be premature, because one month doesn't make a trend. But this could be the beginning of the end of this long recession. It's going to take a while to see, but we've had a whole series of month-after-month of declines, so this is welcome news."

The number of unemployed Nevadans fell for the first time in the past year, dropping from 146,400 in March to 146,300 in April.

Still, the proportion of Nevadans without jobs rose statewide, going from 10.3 percent in March to 10.6 percent in April. That April rate was just a tenth of a percentage point below the state record of 10.7 percent, set in December 1983.

Joblessness in Las Vegas stabilized from March to April, staying at 10.4 percent. Unemployment in both Las Vegas and across the state is nearly double April 2008's levels.

Local economists said the number of unemployed might have declined as the percentage of jobless people increased because of seasonal adjustments in data, or because people quit looking for employment and dropped out of work-force tabulations.

Employers also created fewer jobs, Anderson said. Companies reported 5,200 fewer positions statewide in April than they reported in March. That's down from an increase of 5,100 positions in the same period a year ago, and it's well below the five-year average of 11,320 new positions from March to April.

The U.S. Labor Department said Friday that 44 states lost jobs month-over-month in April. California saw the steepest decline, with 63,700 positions lost. Employers in Texas dropped 39,500 jobs, while Michigan's businesses reduced payrolls by 38,400 positions. Ohio's job market shrank by 25,300 posts.

States with job growth in the period include Arkansas, Florida and Montana, which all enjoyed gains of 1,300 to 1,500 jobs.

Since the recession began in December 2007, the United States has lost 5.7 million jobs. National unemployment stands at 8.9 percent, a quarter-century high.

In Nevada, industries that lost the most jobs month-to-month include retail, which cut 1,600 jobs; professional and business services, which slashed 1,400 positions; local governments, which pared 1,500 posts; and construction, which shed 1,200 jobs.

The state's dominant sector, gaming resorts, ended a string of monthly losses, staying flat from March to April. Food service and drinking establishments added 1,100 jobs and education and health services added 100 jobs. Year-over-year in April, Nevada's employers dropped about 55,000 jobs, with 22,600 of those jobs in construction.

That's the "sharpest (annual) decline" in unemployment in the last two decades, noted Brian Gordon, a principal in Applied Analysis, a local business advisory firm.

In the first four months of 2009 alone, Nevada jettisoned 5.7 percent of its job base. Those losses makes the recession of the early 1980s, when state unemployment last hit records, look tame: Throughout 1982, Nevada dumped 2.4 percent of its jobs, Anderson said.

Economists said conditions set the stage for additional job losses through 2009.

First, construction unemployment could increase sharply once developers finish building major projects such as CityCenter. No substantial resorts are planned along the Strip after the current wave of construction ends, so the 8,500 workers building CityCenter will have a tough time replacing their jobs, Anderson said.

What's more, vacancies inside office buildings, industrial parks and retail centers have risen sharply, so construction of commercial space will likely retreat in coming months, Gordon said.

And as the Detroit Three American automakers restructure in coming months, local car dealerships will close, potentially putting hundreds more out of work. Dealers of new cars already junked more than 550 jobs in Nevada through the third quarter of 2008, the latest period with available statistics. Chrysler said May 14 that it would cancel sales agreements with four local dealers, though General Motors hasn't said it would pull area franchises. Dealer closings could "significantly increase" job losses later in the year, Anderson said.

Just how much unemployment increases will depend on a handful of other factors.

If unemployed construction workers leave the state to look for work elsewhere, the labor force here will shrink, and the unemployment rate could, Schwer said.

Plus, federal stimulus spending could boost construction employment if some of that cash makes its way into local projects, Schwer said.

The 10,000 to 12,000 jobs CityCenter creates could offset job cuts from the project's completion. But with 16,600 jobs lost in hospitality locally in the past year, CityCenter may create only "incremental growth" in the overall job market, Gordon said.

Senate Majority Leader Harry Reid, D-Nev., said in a statement that the state's economy has shown signs of life, with casino executives pointing to recent increases in hotel occupancy and improvements in convention bookings. He also noted that corporations, including IBM and Southwest Airlines, have brought thousands of workers to Las Vegas for employee appreciation events and business meetings.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512. The Associated Press contributed to this report.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Sandra wrote on May 23, 2009 09:41 PM: No unions, no healthcare, low wages. America, the beautiful. douglas wrote on May 23, 2009 02:35 PM: what happens to that unemployment number when harry osama reid gets his "pre-citizens" legalized ? or when the tens of millions of central and south american indigents surge across the promised "open borders", to the land of the freebies ?" David wrote on May 23, 2009 02:20 PM: Whether the Democrats raise taxes or the Republicans control the economy with uneven wealth distribution (the rich get richer and the middle class disappears) it is the middle and lower classes that always get screwed. In a no win situation, I would rather the rich get taxed for not sharing, than the rich get richer by controling wages and dodging tax liabilities via loopholes. Randy wrote on May 23, 2009 09:18 AM: Its a good thing we have all these smart Democrats taxing us so they can spend our money on the things they've determined are important. Yes, they know better than us. And we don't have to worry about them wasting the money, because they have ethics rules that prevent them from stealing and cheating - or did. And we have open meeting laws so that we can know what they're doing - except when they don't want to open the doors that is. Oh and they're accountable to us every 2 years when they go up for re-election so we know they at least listen to our needs within the last month of the campaign. All is well, thank goodness for our democracy, things just couldn't be better with our ethical, transparent and accountable tyranny....I mean democracy. Common Sense wrote on May 23, 2009 08:58 AM: "Afraid the truth might hurt the public if they calculate how unemployed this state really is?" Yes, the politicians are afraid. And the people are hip to their manipulation of statistics; most famously, the one that takes unemployed people off the "unemployed" list after their benefits expire. They still don't have jobs, but the state conveniently doesn't have to admit that any longer. The official figures also fail to count the people who take deep pay cuts to keep their current jobs, or see their "positions eliminated," but accept lower paying jobs from the same employers, or the salaried employees who still have the same job, but now have to work a ton of overtime to keep it. This is called "under-employment," and if you look hard enough, you can find some credible statistics that quantify it. The last I saw, the un- and under-employment rate totaled 15%. Of course, it may seem disingenuous to lump in those who have jobs with those who don't. But the purpose of compiling unemployment statistics is to provide a realistic number to judge the condition of the overall economy. Since consumer spending accounts for two-thirds of "the economy," and since employees who take pay cuts and work extra hours have neither the time nor money to purchase discretionary goods and services, under-employment is a relevant figure. So consider that the next time you hear the "official" numbers. Also, consider the people who still have decent jobs, but aren't spending out of fear of losing them. And consider the people like me, who make a nice living and have plenty of savings, but refuse to spend money in order to deprive the socialists in government of as much revenue as possible. We're not counted in the statistics, but our influence is evident. Bat Guano wrote on May 23, 2009 08:37 AM: Bottom - are you kidding me. When everyone's benefits run out the politicians will say they've 'fixed' unemployment. Fortune tellers are more accurate than 'economists', cost less and only lie half as much. Common Sense wrote on May 23, 2009 08:00 AM: "Where have I heard that before?" You've heard it about once a week for the past two years. Politicians, economists, stock brokers, and (of course) realtors all have a version of "Now is the time to buy!" They know that if they keep saying it long enough, eventually they'll be right. Kind of like a broken clock that magically displays the correct time twice each day. Unfortunately, they jumped the gun the past few weeks. Remember all the propoganda that "officials" fed us in late April / early May about "the recession is over?" Yeah, it's over, except for those pesky issues like rising unemployment, falling consumer spending, steady home foreclosures, tax increases, looming inflation ..... But, hey, why sweat the details? Clark County Development Services wrote on May 23, 2009 07:53 AM: Are you kidding me? The bottom is not anywhere near!!! June 26, 2009 Clark County is laying off employees therefore adding more FORECLOSURES and repossessions. More famiies thrown out on the streets adding additional burdens to the state and federal agencies. THIS did NOT have to happen if County Manager Virginia Valentine was not so inept and a part time county commission more interested in lining their pockets instead of taking care of county business. While hundreds of counties two to three years ago were going into cost containment mode Virginia and her crew were still "partying on" ignoring and laughing at employees who would dare mention to her any talk about a down turn in the economy. The city of Henderson did the right thing terminating their city manager for being financially inept. Mr. Rory Reid wants to be your next governor....Mr. Reid you can't even take care of a single county; how are you going to take care of the State of Nevada? Mr. Ron Lynn lied about his credentials...the county kept him yeah look where that got us? Randy Walker has lost the county millions upon millions in law suits and yet the county keeps him.....look where that got us. Virginia Valentine a fair weather leader.....look where that got us. The Clark County Commission is mostly part time folks like Rory Reid, Chris G. Steve Sissylack.....look where that got us. To the people of Las Vegas who care...please come to any and all public meetings and be heard. Now is the time to protect your taxes and interests and by all means VOTE. jm0405 wrote on May 23, 2009 05:24 AM: If you note, they are not mentioning construction as in general contractors that build roads. They only mention construction people that build houses and hotels. Look on the NV DOT page - you see that companies like Frehner bid too high on every job, have 2 jobs going until September at the latest - only 1 job pending that is to last 6-7 months only in Logandale/Overton. By the time Logandale job starts, it will be staffed so basically these other 2 construction jobs will have a host unemployed workers! What about Capriati Construction, Granite, all of them EXCEPT LV Paving? Do the math folks - when the current construction jobs finish this summer, then what? Oh! Unemployment rate in NV up to an easy 15% by Christmas. Note - no mention has been made about general contractor construction worker layoffs - only those laid off for City Centery and Fountainbleau. Why is this whole industry ignored? Afraid the truth might hurt the public if they calculate how unemployed this state really is? Downturn wrote on May 23, 2009 04:14 AM: "Prosperity is right around the corner" Where have I heard that before?