Nevada’s Economy During the Pandemic
One of the most significant issues of 2020 has been the COVID-19 pandemic and its effect on the economy. This month, the UNLV Lee Business School’s Center for Business and Economic Research (CBRE) posted its latest report on Nevada’s economy.
According to the report released on October 8, 2020, The CBER Nevada coincident index experienced a 2.1% month-over-month increase in July. This increase reflects increases in taxable sales, gaming revenue, and nonfarm employment, as all three items moved higher by 0.9%, 28.4%, and 0.5%, respectively, from June 2020. Of course, this also comes after the dramatic month-over-month decreases in these data series in April 2020. That number indicates that the coincident index continued to recover some of the substantial month-over-month losses it experienced in April.
Nevada Coincident Index
The CBER Southern Nevada coincident index increased by 2.4% in July compared to the previous month. This increase resulted from monthly gains in taxable sales (3.1%), gaming revenue (33.7%), and nonfarm employment (0.5%) from June. Once again, the increase partly reverses the substantial month-over-month decrease in the index in April.
The Southern Nevada coincident index decreased year-over-year. The index dropped by 7.9% from last year. This decrease reflected losses in taxable sales (-9.0%), gaming revenue (-28.1%), and nonfarm employment (-12.6%).
Southern Nevada Leading Index
The CBER Southern Nevada leading index experienced a moderate gain of 2.1% month-over-month. On the positive side, we saw increases in the ten-year real Treasury yield (inverted at 0.4%), housing permits (52.5%), Nevada passengers (48.6%), and S&P 500 (2.3%) from June.
The initial claims for unemployment (inverted) and housing permits decreased by 23.1% and 20.5%, respectively. Once again, the increase in the index partly reversed the month-over-month decrease experienced in April.
The CBER Southern Nevada leading index also significantly dropped by 2.7%. The ten-year real Treasury yield (inverted) and S&P 500 increased by 0.6% and 7.0%, respectively, from June 2019. On the negative side, the initial claims for unemployment (inverted), housing permits, commercial permits, and Nevada passengers declined by 569.6%, 15.7%, 36.6%, and 64.0%, respectively, from the prior year.
The CBER Southern Nevada tourism index increased by 6.1 percent month-over-month in July. McCarran airport passenger volume (1,547,201) and gross gaming revenue ($632,310,500) experienced large increases of 48.6% and 33.7%, respectively. On the negative side, the Las Vegas hotel/motel occupancy rate fell marginally by 0.2% from June. The month-over-month increase continued to reverse the large month-over-month decrease in April.
On an annual basis, the Southern Nevada tourism index exhibited a loss of 9.8%. McCarran airport passenger volume, gross gaming revenue, and the Las Vegas hotel/motel occupancy rate fell considerably by 64.0%, 28.1%, and 53.3%, respectively.
The Southern Nevada construction index ticked slightly downward by 0.1%from last month. Construction employment (71,120 jobs) and commercial permits (20) decreased by 1.1% and 20.5%, respectively, from June. On the positive side, housing permits (1,318) increased by 52.5% from the previous month. We note that unlike the other indexes, the construction index does not yet appear to be affected by the COVID-19 recession.
The Southern Nevada construction index slightly decreased by 0.5% from the previous year. On the positive side, construction employment increase by 1.2%. On the negative side, decreases were seen in the number of housing permits (-15.7%) and commercial permits (-36.6%) from last year.
Each year, the CBRE and the Las Vegas Global Economic Alliance host an outlook presentation with economic projections for the coming year. This year, the presentation will take place virtually on Wednesday, December 2, 2020, from 9 a.m. to 10:30 a.m. (Pacific Time). You can click here for tickets and updates on the event.
The U.S. gained 661,000 jobs in September and the national unemployment rate at 7.9% compared to the nearly historic high of 14.7% at the peak of the coronavirus pandemic. Based on those numbers, WalletHub, on October 20, released updated rankings for the States Whose September Unemployment Rates Are Bouncing Back Most, along with accompanying videos and audio files, to illustrate which areas of the country have had the best recovery so far.
Nevada ranks #50, just above Hawaii at #51, on the list of states that have Bounced Back Least. Number 49 on the list is California, with #48 Massachusetts, #47 Rhode Island, #46 New York, #45 Illinois, #44 New Mexico, #43 Michigan, and #42 Texas rounding out the bottom.
The states that have Bounced Back Most are #1 Nebraska, #2 South Dakota, #3 Missouri, #4 Iowa, #5 Montana, #6 North Dakota, #7 Wisconsin, #8 Kentucky, #9 Alaska, and #10 Vermont.
“The unemployment rate does differ sharply among different demographics. The unemployment rate for white people is 6.8 percent, while it’s much higher, at 11.5 percent, for black people. The racial disparity is troubling, especially in the context of broader discussions of inequality that have taken place this year,” said Jill Gonzalez, WalletHub analyst. “The unemployment rate can fluctuate a lot by age, too; it’s only 6.4 percent for those aged 45 to 54, but 12.5 percent for people aged 20 to 24. It makes sense that people who have been in the workforce longer would have more job stability, but we should be concerned about the difficult conditions faced by young people.”