Nevada jobless rate could hit 15 percent - News

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Aug. 22, 2009
Copyright © Las Vegas Review-Journal

Nevada jobless rate could hit 15 percent

Low consumer spending and construction slows rebound

By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL

We won't have Michigan to kick around much longer.

Michigan, long the nation's paragon of economic decay, has a jobless rate of 15 percent, and local experts say it could be just a matter of time before parts of Nevada approach the Great Lakes State's unemployment rate.

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In early 2009, Nevada economists projected a jobless peak of 11 percent to 11.5 percent. But unemployment blew past those forecasts, reaching 12.5 percent statewide and 13.1 percent locally in July, the state Department of Employment, Training and Rehabilitation reported Friday.

Next and final stop? Depending on who's prognosticating, it's somewhere in between 13 percent and 15 percent.

Jered McDonald, an economist with the employment department, said his agency is working on a new round of projections. He doesn't yet have a concrete target, but he said he expects statewide joblessness to top out between 13 percent and 14 percent sometime in the spring.

Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, said Las Vegas jumped from 12 percent to 13 percent far faster than he anticipated, so Las Vegas could well see another full percentage point tacked onto the current rate.

And Jeremy Aguero, a principal in local research firm Applied Analysis, said 15 percent "certainly isn't out of the question" by the end of 2009.

Few Nevada industries are poised for expansion, Aguero said. In fact, some of the state's biggest employment sectors are set for additional job losses through year's end. Take construction: About 9,500 laborers will lose their jobs when building concludes at CityCenter in December. Nevada had 125,000 construction jobs at its peak two to three years ago.

That number is down to 90,000 and falling. With no new major resort or commercial projects on the drawing board and fewer than 400 housing permits issued in Las Vegas per month, the state has few options for replacing the lost positions.

Schwer said he's also concerned the nation's slump in discretionary spending could be permanent. Consumers, burned by high debt, might hang on to their newfound miserly ways -- the country's average savings rate skyrocketed from zero in 2008 to 7 percent now. And the Cash for Clunkers car-buying program likely absorbed substantial amounts of discretionary dollars.

"People may not spend on travel to Las Vegas, or if they do, they will spend less," Schwer said.

Growth will have to return to the national economy before expansion revisits Nevada, said Bill Anderson, chief economist for the state employment department. And there, at least, a few positive indicators have materialized: The gross domestic product isn't shrinking nearly as quickly as it did a couple of quarters ago, unemployment fell from 9.5 percent to 9.4 percent between June and July and housing starts rose 3.6 percent in June.

Observers said they don't expect joblessness in Nevada to stabilize in 2009.

Schwer said unemployment here could stop growing in mid-2010 if the nation's nascent recovery holds through the end of 2009. Aguero said unemployment in Nevada could level off in the fourth or first quarters following the late-2009 openings of projects including CityCenter, the Hard Rock Hotel's expansion, Planet Hollywood's addition and the Hard Rock Cafe on the Strip.

Returning to single-digit joblessness will take considerably longer, though.

Conservative estimates from Applied Analysis forecast statewide unemployment of 9.9 percent in the third quarter of 2011.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

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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. joe wrote on August 22, 2009 09:24 PM: The unemployment rate would be less if the Clark County School District would start hiring highly qualified teachers instead of long-term substitutes to teach classes. I can't believe this practice is still allowed, when they have so many real teacher applicants to hire. Easyrider62 wrote on August 22, 2009 07:29 PM: I'm still waiting on my Stimulous Check so I can hold onto my home, we-those 500,000 unemployed construction workers have taken it on the nose! It's not just those Union 90,000 that are impacted it's all the rest. Get it right, we r not being counted any more-it's bad news ya know. Our country is in a world of hurt! Free Nevada wrote on August 22, 2009 05:04 PM: It's a Nevada Smack Down. Seriously, send the fleet of 7x7s to Long Beach to clear out the original 1945 Leisure World and move them all to Sun City. That will make up for loss of revenue from construction folks so nobody else loses their job as we raise gaming taxes. As far as helping the construction folks themselves, we need to to tap the billions allocated for OC/IE commuter congestion and secure additional funding for a Boulder/Hoover-Dam like public works project to build a mag-lev from Irvine to Indio to Blythe to Primm to Vegas. As far as getting them back to work right away, the Irvine to Indio leg brilliantly avoids a lot of urban-sprawl (and is therefore easy to get approved, as the serious environmental opponents would rather have a 300+mph pollution-free mag-lev shooting through the scenic Cleveland National Forest for everyone to enjoy than an underground or above ground 10-lane freeway --and they know it is just a matter of time before something like that has to be done). The Indio to Blythe stretch is through an existing rail corridor --no brainer survey/approval. Blythe to Primm and Primm to Vegas is barren desert built around the edge of an ancient volcano. (There needs to be surveys and hearings but we can start moving guys into position!) HELEN WEILS wrote on August 22, 2009 04:23 PM: HEY GOVERNMENT EMPLOYEE DI*KHEAD, I DON'T DO CRACK YOU MORON. I LEAVE THAT UP TO YOU GUYS, SINCE YOU'RE NOT DRUG TESTED, ARE YOU? Jeremy wrote on August 22, 2009 03:18 PM: It will pick up eventually, but the grand lesson to be learned from this is that perhaps NV, Clark County, et al need to pull back some of the tax and financial incentives from gaming and put them toward incenting non-gaming and non-gaming-related businesses to move to the valley. I'm sure a few in CA are ready to move out. All of our eggs are, obviously, in one basket. Helen is on crack wrote on August 22, 2009 02:18 PM: "MEANWHILE, ALL GOVERNMENT EMPLOYEES RECEIVED RAISES THIS YEAR". Helen, get off the crack. State employees, minus teachers, have not received a raise. As a matter of fact, we gave up over 6 percent. And unlike the firefighters, we did not get it back somewhere else. I am pretty sure state employees fall under government employees, crackhead. HELEN WEILS wrote on August 22, 2009 09:10 AM: MEANWHILE, ALL GOVERNMENT EMPLOYEES RECEIVED RAISES THIS YEAR. Shilling in August wrote on August 22, 2009 08:47 AM: Harry, we're getting clobbered here...Where are you? Where are you?