Click image for enlargement. Graphic by Mike Johnson.

Fewer people are moving to Las Vegas each month and the housing market continues to slump, but other sectors of the economy, such as employment and travel and tourism, signal modest growth for the next six months, a local economist said Thursday.

Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, said even with weakness in residential construction, the outlook remains "guardedly optimistic."

The Southern Nevada Index of Leading Economic Indicators, compiled by the center, climbed to 132.98 in January, up from 131.91 in December. Schwer said the gain is largely the result of a strong month for gross gaming revenue, which rose 16.9 percent to $989.6 million.

The index is a six-month forecast from the month of the data, November, based on a net-weighted average of 10 series of indicators after adjustments for seasonal variation.

The accompanying chart includes several of the index's categories, along with data such as new residents and employment and housing numbers, updated for the most recent month for which figures are available.

"The big issue was gaming numbers were way up. That's the first thing that jumps out," Schwer said. "The second thing is housing continues to rebalance itself. We've got a surplus. It's going to take a while for the excess inventory to get picked up, so permitting is way down."

New home permits dropped 18.5 percent in December to 2,089 and finished the year down 25 percent at 23,219, Home Builders Research President Dennis Smith reported.

Schwer said the gain in the gaming revenue component of the index comes at the same time that housing indicators have weakened, helping to keep the economy in a healthy position.

"Nonresidential construction and travel and tourism continue to do very well," he said. "We would have a much more pronounced economic slowdown without these two components."

John Restrepo of Restrepo Consulting Group said the national housing slowdown could affect the number of people moving to Las Vegas.

"I think it's probably a function of the economy growing at a more normal level. Two months don't tell us much," Restrepo said. "Retirees who would normally be moving here are having trouble selling their houses in other markets. Also the workers may be staying put because they can't sell. That could be part of it."

Schwer said the national economy remains generally strong even though the United States is running huge budget deficits because the country has been able to borrow money from abroad.

"Remember, the Fed (Federal Reserve) is still deeply concerned about the prospect of inflation," Schwer said.

"They didn't increase or decrease interest rates in the last meeting. They didn't increase interest rates for fear of the housing market nationally and they didn't drop interest rates because they did not think the economy was performing poorly," he added.

Although economic data for last year were generally strong, a moderating trend was evident, Nevada Department of Employment, Training and Rehabilitation economist Jim Shabi said.

Job growth averaged 6.2 percent statewide in the first quarter of the year, but dropped to 4.6 percent in the fourth quarter, he said. Conversely, the unemployment rate rose from a record low 3.6 percent in January to 4.4 percent at year end.

The slowdown in housing was a contributing factor as the rate of construction job growth fell from 16 percent at the start of the year to less than half that pace in the end, Shabi said.