Tuesday, January 13, 2004
Copyright © Las Vegas Review-Journal

Most economic indicators up, but some give mixed message

A house for sale Monday on Red Bay Way in northwest Las Vegas. Existing home sales rose nearly 40 percent in November. Photo by Clint Karlsen. Click image for enlargement. Graphic by Mike Johnson.

Most of the major Southern Nevada economic indicators are showing gains, but disparity exists between some of the numbers, a data researcher believes.

Jeremy Aguero, principal of Applied Analysis in Las Vegas, said he's concerned that employment growth is not keeping pace with population growth.

"All I'm saying is there's a lot of information coming in, but some of it doesn't make sense," he said. "With all these people moving into the valley, what jobs are they all getting?"

The latest data from the Center for Business and Economic Research at University of Nevada, Las Vegas, show 6,089 new residents in November, a 6.4 percent increase from the same month in 2002, based on out-of-state driver's licenses turned over to the DMV. Through November, the driver's license count was up 10.3 percent for 2003.

Total employment grew 4 percent over the last 12 months to 831,000, roughly 32,000 new jobs for 88,000 new adult residents, minus an estimated 25 percent attrition rate.

Overall, the Southern Nevada Index of Leading Economic Indicators compiled by the center climbed 1.5 percent in December from 2002 to 130.15, though it declined slightly from 130.28 in November.

The index, weighted by 10 categories of economic indicators, is a six-month forecast from the month of the data.

The accompanying Review-Journal chart reflects several of the index's categories, along with other data such as new residents and employment and housing numbers, updated for the latest month.

"Having shown a markedly upward movement in the second half of 2003, the December index declined slightly, leaving us to believe that the leading economic indicators remain on an upward course for 2004," said Keith Schwer, director of the UNLV research center.

The housing market continues to put up strong numbers. Existing home sales rose nearly 40 percent in November and new home sales were up 28 percent. There was a 6 percent drop in new home permits, but they're up 11.1 percent for the year.

Clark County gaming revenue, one of the more heavily weighted categories, contributed negatively to the index, down 2.8 percent from the previous period but up 1.6 percent from a year ago.

Taxable sales continue to rise, jumping 12.1 percent from a year ago to $2.24 billion and topping $2 billion for the eighth straight month.

Schwer said national employment numbers reported Friday are down again, the most troubling trend for economists.

"The income numbers and expenditures will probably be pretty strong. It's the employment market that continues to be somewhat soft," he said. "We still think it's going to be a strong year."

Asha Bangalore, economist for Northern Trust Co. in Chicago, said the decline of the national unemployment rate to 5.7 percent in December is not a sign of an increase in employment or hiring, unlike October and November when there was an explicit increase in employment.

In December, the labor force shrunk by 309,000 and total employment declined by 54,000. The civilian participation rate, or the proportion of the population counted in the labor force, fell to the lowest level since December 1991, Bangalore said.

"A falling civilian participation rate is a not sign of improving labor market conditions," she said. "The important message is that firms remain unwilling to increase their payrolls."

With the exception of gaming and tourism, major indicators for the local economy have exceeded expectations, catching up to where they were before Sept. 11, 2001, Aguero said.

"If there is a downside, it's that national employment has dropped. We remain concerned about the fact you don't see a lot of new jobs added to the market," he said.