Nevada adds workers in February but sees jobless rate rise

Unemployment in Nevada and Las Vegas set records in February, but that doesn't mean the Silver State's job market worsened significantly, experts said Friday.

New numbers from the state Department of Employment, Training and Rehabilitation show some bright spots: From January to February, Nevada added jobs for the first time since October, and beleaguered sectors, including construction and leisure and hospitality, either stopped shedding positions or expanded their work forces.

Yet, the statistics also reveal that unemployment here remains stubbornly high, hitting pinnacles in February of 13.2 percent statewide and 13.9 percent in Las Vegas. Joblessness in Nevada handily outstripped unemployment in every state save Michigan. What's more, few economists say the Silver State is poised for a noticeable near-term rebound.

"The latest data demonstrate that the recovery process is going to be slow and will take time," said Brian Gordon, a principal in local research firm Applied Analysis. "Clearly, we've not yet turned the corner."

Added Bill Anderson, chief economist of the employment department: "I think we're hitting the bottom rather than turning around. I don't want to get too optimistic and say we're in the early stages of recovery. Rather, I think we continue to see signs that we're more or less bouncing around the bottom of the business cycle."

First, about those improvements.

Most strikingly, construction stopped its three-year jobs skid, stabilizing from January to February at 66,900 workers. Employers in Nevada added 10,400 positions -- the first glimmer of growth since October. State government brought on 3,900 workers, as faculty and staff returned to colleges and universities for the spring semester. Leisure and hospitality added 2,700 employees, while professional and business services such as accounting and engineering added 2,200 jobs. The combined category of education and health services increased by 1,800 jobs.

Still, roughly 6,000 Nevadans entered the labor force seeking work, and that influx countered many of those jobs gains and forced the jump in unemployment, Anderson said. In February, 189,000 Nevadans were out of work and looking for jobs. Most -- 137,500 -- were Las Vegans.

Nevada's jobless rate remains well above the nation's unemployment level of 9.7 percent.

Experts credited Nevada's bigger work force to several factors.

The state could still be welcoming new residents, and recent college graduates may have started looking for work. Also, unemployed spouses whose partners have seen wage cuts might be returning to the job market to pad shrinking household incomes.

It's tough to predict whether February's twin trends of job gains and labor-force expansion will continue, observers say.

On the jobs front, Gordon said the worst may not be over for the building sector. He said he's loath to call an end to the construction carnage based on just one month of data, because Nevada dropped 24,300 construction jobs -- 26.6 percent of the sector's work force -- year over year in February. Some of the state's biggest employers do have ongoing construction needs, such as hotel-casino maintenance, tenant improvements inside local commercial parks and infrastructure enhancements, so employment in the industry should ultimately hit a floor below which it won't fall. Gordon said he's not convinced the sector is there yet.

Stephen Miller, an economics professor and department chairman in the College of Business at the University of Nevada, Las Vegas, sounded more hopeful.

Housing permits issued on future homes jumped from 460 in November to 806 in February, while commercial permits on office parks, shopping centers and industrial complexes rose from 27 in November to 30 in February.

"Building-permits data are important, and when they're rising, that's a good sign," Miller said.

Miller also pointed to the potential for additional stimulus funding to push Nevada into recovery.

Congress has largely targeted stimulus funds at infrastructure projects and green energy, and in those areas, the employment department's numbers show mixed signals. Construction did stanch its job losses from January to February, and manufacturing added 100 jobs in the month. Trade, transportation and utilities shed 800 jobs. All three sectors remain well below their employment levels of a year ago, and it seems the recession has, at least up to now, overwhelmed attempts to jumpstart commerce through spending.

Nevada's fortunes reversed dramatically during the recession, and observers disagree on when the Silver State might see better times. Nevada's jobless rate jumped 7.5 percentage points from 2006 to 2009, the biggest increase of any state.

Nationally, economic indicators including gross domestic product and manufacturing output have perked up, but "severe weakness" remains in the country's labor force, Anderson said. Businesses have enjoyed productivity gains with smaller staffs, so managers have little incentive to hire. Anderson said he doesn't expect substantial job growth to return nationally until uncertainty wanes and businesses see prolonged demand for new production.

That's bad news for Nevada, Anderson said, because the longer it takes for hiring to pick up nationally, the longer it will take for Nevada's leisure and hospitality sector to recover .

"Consumers are still in no mood to spend," Anderson said. "Negative pressure on wage growth and disposable-income growth will persist as long as the labor market remains soft. Workers are still uncertain about short-term prospects and are unlikely to spend on recreation and entertainment anytime soon. It appears Nevada will be waiting some time for its fortunes to improve."

Miller said he expects to see recovery in Nevada sooner rather than later. The national recession seems to have ended unofficially in July, he said, and it's only a matter of time before Nevada follows the rest of the country out of the downturn.

"I think we're going to see recovery this year," he said.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.