Las Vegas joblessness ticks up in May

Looks like employers are still skittish about hiring.

Friday's jobless numbers from the state Department of Employment, Training and Rehabilitation -- as well as anecdotal evidence from local staffing agencies -- indicate weaker-than-expected seasonal hiring in late spring, as businesses backed off on adding workers.

Unemployment in Las Vegas rose to 12.4 percent in May, up from 12 percent in April. Joblessness dropped statewide in the month, from 12.5 percent to 12.1 percent. State numbers are difficult to compare to local trends because the department seasonally adjusts statewide data but not local figures. Unadjusted, the state's unemployment rate rose from 11.9 percent in April to 12.1 percent in May.

Bill Anderson, chief economist for the employment department, cited disappointing job growth.

From April to May, Nevada's economy added 1,500 jobs, or about 5,000 fewer positions than normal, Anderson said. May's job formation also trailed growth from previous months. The state's employers created 3,600 new jobs in April and 10,000 in March.

Observers blamed May's feeble job growth on falling national economic indicators and prior hiring trends, though they also agreed the newest unemployment figures probably don't portend another downturn.

Doug Jones, branch and regional manager for Marathon Staffing Group in Las Vegas, said his company felt May's softer hiring firsthand.

After an increase in orders for temporary workers in the first quarter, business dipped noticeably and dropped below expectations in May and early June. Jones traced the falloff to bad economic news in May. Weekly first-time jobless claims jumped nationally in the month, and manufacturing activity also fell. The trends spooked business owners, Jones said.

"The numbers just caught businesses off-guard a little bit, and sort of knocked plans back for June," he said. "The attitude became wait-and-see. I believe it was just a knee-jerk reaction."

Brian Gordon, a principal in local research and consulting firm Applied Analysis, agreed that uncertainty played a role in May's growth skid. But he added that stronger first-quarter job growth might also have hurt demand for spring hiring, as businesses adding full-timers in the winter decided they had enough staffers to handle seasonal sales gains in the second quarter.

May brought the first hiccup since January for local unemployment. Joblessness in Las Vegas reached 14.9 percent in December, but had fallen from January through April.

May's growth reversal isn't entirely unexpected, experts said. It's also not necessarily a sign that the economy has taken a turn for the worse.

Economic turning points are volatile, so an economy moving from recession to recovery will show big swings in indicators from month to month, Anderson said. Unemployment could rise one month, and plummet the next. Consider changes in the number of jobs statewide in 2011. In any single month from January through May, year-over-year job counts have fallen by as much as 16,000 or jumped by up to 4,000.

But combine jobs data from those five months and measure them against the first five months of 2010, and things look more stable, with numbers flat year over year, Anderson said. Household employment from January through May fell 1.1 percent when compared with the same period in 2010. In 2009, household employment dropped nearly 6 percent in the first five months of the year.

"We're more or less moving sideways, overall," Anderson said.

Gordon added that average hours worked in the local private sector have stabilized, going from a low of 33.8 hours a week in February and March to 34.1 hours in April and May. Average weekly earnings rose in the same period, from $655 to $677. Both indicators hint that companies are seeing more business, and could be ready to add workers soon.

Jones said he's already seeing temp orders for July and August pick up.

"I think businesses had a chance to rethink things, and decided to stick with their plans," he said.

It'll likely still be a while before Nevada and Las Vegas see sustainable overall job creation of 2 percent to 3 percent a year. Some sectors, including leisure and hospitality and professional services, are already expanding, but cuts in construction and government jobs have offset those gains.

The employment department expects the state to begin to "eke out" positive job growth by the end of 2011, Anderson said.

Until then, expect a bumpy ride, with unemployment rising or falling in a given month as the labor force fluctuates.

Said Gordon: "I don't think anyone in this environment has a sense that the market has recovered. We are still months, if not years, away from a recovery. That said, some indicators would suggest that corrections are taking place, and positive movements may be on the horizon in selected sectors such as leisure and hospitality. But during this period in the trough, we will see data tend to bounce around from month to month. The longer term will provide a better look at where we're headed."