Economic stabilization

It's a good thing we're supposed to give thanks this week. Nevada's latest batch of economic data, delivered just in time for the holidays, provides precious little to be happy about, but it's not all bad.

On Monday, the state reported Nevada's record unemployment rate dropped in October, from 14.4 to 14.2 percent. In Las Vegas, the drop in the unemployment rate was much steeper, from a record 15 percent in September to 14.1 percent in October.

However, the unemployment rate didn't fall because of private-sector job creation. It declined because 10s of thousands of Nevadans have stopped looking for work here, with a large number of them leaving the state altogether.

While that means less competition for the few jobs that become available, it worsens the valley's oversupply of housing. On Tuesday, Home Builders Research reported sales of new and existing homes dropped last month, signaling the start of real estate's slow season, and the median resale price now mirrors costs from 1996.

Home values won't begin to rebound until lenders churn through thousands more foreclosures and distressed-property sales. And the foreclosures won't stop until good-paying work is quick to come by.

"Unemployment and lack of job growth is the core for the other factors that are weighing down our housing market," said Dennis Smith, president of Home Builders Research.

Meanwhile, the Department of Taxation reported Tuesday that statewide taxable sales increased 2.1 percent from September 2009 to September 2010, while sales in Clark County dipped 0.9 percent. Slumping sales of construction materials, dropping almost 21 percent, continued to negate modest gains in other sectors.

"We're starting to see some stabilization in overall consumer spending," said Brian Gordon of Applied Analysis. "Consumers are coming back."

The lack of significant improvement in the economy means the state's budget outlook remains dismal. Next month, the Economic Forum will provide revenue projections for Gov.-elect Brian Sandoval's two-year spending plan. He shouldn't expect a rosy forecast.