Nevada, local unemployment numbers up

Nevada's jobs market posted another disappointing month in July, with experts predicting continued unemployment struggles at least through the end of 2011.

Unemployment in Las Vegas rose from 13.8 percent in June to 14 percent in July, while joblessness statewide jumped from 12.4 percent to 12.9 percent, the state Department of Employment, Training and Rehabilitation reported Friday. It was the second straight month of unemployment increases after several months of declines. In all, 180,800 workers, including 133,300 Las Vegans, lacked jobs and were looking for work in July.

"It's pretty bad," said Steve Brown, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. "Even though tourism, hospitality and gaming are doing well, we've actually lost jobs in the first seven months of the year compared with the same period a year ago. We're not yet really seeing a recovery that is extending throughout the entire Las Vegas economy."

Nearly every major sector in the state lost jobs from June to July, including leisure and hospitality, finance, government and professional and business services such as accounting, law firms and architecture studios. Education and health services, a combined category that has added jobs steadily through the downturn, stayed flat.

Brown said that July's numbers reflect turmoil surrounding the nation's debt-ceiling crisis. Plus, July's job cuts were small enough that Brown thinks they could come from attrition -- companies not replacing workers who have left. He said companies simply might have grown cautious in July.

"There was a lot of uncertainty in July about what was going to happen with the government's budget. I think what we're seeing is businesses taking a conservative attitude toward hiring," he said.

Companies weren't as conservative as they could have been, though.

The employment department noted that job losses in July were below their recent norm. Nonfarm jobs in Nevada fell by 8,800 positions, to 1.11 million, from June to July, compared with an average decline of 12,500 over the past five years, indicating a slowdown in job cuts, said Jered McDonald, an economist with the employment department.

Also, the state's labor force held steady in June and July, after roughly a year's worth of declines of 3 percent or more. The stabilizing trend has its positives and negatives, McDonald said. A smaller labor pool often means a lower unemployment rate -- witness the state's steep jobless drop in the first part of the year, from 14.9 percent in December to 12.1 percent in May. On the other hand, a growing work force indicates increasing confidence, as people return to the labor pool in search of jobs.

Include discouraged workers who have quit looking for jobs and underemployed part-timers who want full-time positions, and the state's jobless rate is 23.3 percent, according to the Bureau of Labor Statistics.

Brown said major improvements in the state's jobs picture will have to wait until at least 2012.

"At this point, our economy is not creating jobs. We're not seeing the growth necessary to put people back to work," Brown said. "Therefore, I think our unemployment rate is likely to remain elevated through the end of the year, at least."

McDonald agreed, forecasting minimal job growth over the next two to three years.

It's also possible that the United States will enter another recession, McDonald said, and that could hurt recovery in the state's most important industry, the hospitality sector.

Las Vegas posted a 5 percent gain in visitor volume in the first six months of 2011, and Nevada's gaming win spiked at an annual rate of 16 percent in May and June. Leisure and hospitality operators added 2.8 percent to their staffs statewide and 3.1 percent locally year over year in July. Those numbers could slacken if consumers nationwide, beset by economic uncertainty, rein in discretionary spending and force a second recession, McDonald said.

However, Brown's center released a report Friday noting that the likelihood of renewed recession is slight.

The study evaluated seven national economic indicators, including growth in gross domestic product, stock market fluctuations, oil prices and unemployment. Only gross domestic product portended another recession, with growth averaging a sluggish 1.6 percent from July 2010 to June. The other indicators pointed to positive growth in the offing.

"Although the Nevada employment report released (Friday) is bad news, continuing growth in the U.S. economy is good news for some sectors of the Las Vegas economy," Brown said. "The Las Vegas tourism, hospitality and gaming industries have done fairly well in the first half of the year. With the U.S. economy continuing to grow, albeit slowly, we expect continued gains in Las Vegas tourism, hospitality and gaming.

New numbers from the Bureau of Labor Statistics show Nevada keeping its No. 1 ranking for joblessness in July. California came in at No. 2, with 12 percent unemployment. Nationally, unemployment was 9.1 percent in July.

Gov. Brian Sandoval said in a Friday statement that the latest jobless data highlight the importance of diversifying the state's economy. He also said the numbers reinforce the need for a review of business regulations that might hinder corporate growth and job formation in the Silver State.