Statewide jobless rate increases for first time in 2011

It's still ugly on Nevada's jobs front.

And it's likely to stay that way for a while, even as economic-development officials say they're working hard to draw new business to the Silver State.

Nevada's jobless rate rose to 12.4 percent in June, up from 12.1 percent in May, according to Friday numbers from the state Department of Employment, Training and Rehabilitation. In Las Vegas, the rate jumped to 13.8 percent, compared with 12.4 percent. The employment department seasonally adjusts its statewide numbers but not its local numbers, which can mean larger jobless swings in cities. Unadjusted, Nevada's unemployment rate was 13.5 percent in June.

The newest numbers show a step back for Nevada, which had posted jobless declines in every month from December, when unemployment peaked at 14.9 percent, to May.

The reversal didn't surprise Bill Anderson, chief economist for the employment department. Nevada's just following the rest of the country: Unemployment ticked up nationwide, going from 9.1 percent in May to 9.2 percent in June. Employers created just 18,000 new jobs nationwide in June, and the country's gross domestic product grew at a sluggish 1.9 percent rate in the first quarter, Anderson noted.

"Nevada saw decent improvement at the beginning of the year, with the unemployment rate dropping almost 3 percentage points. But June brought indications that weakness nationally has filtered into Nevada," Anderson said.

The numbers weren't all bad, though.

Other than construction and the government sector, most employment categories showed solid gains, said Brian Gordon, a principal in local research firm Applied Analysis. Leisure and hospitality added 8,600 jobs statewide year over year in June, and administrative support companies, including temporary-staffing firms, created 1,900 jobs.

"On the surface, the fact that the unemployment rate appears to be going back to 14 percent in Southern Nevada is difficult to deal with, but when you dive deeply into the numbers, there are pockets of prosperity emerging," Gordon said

UNCERTAINTY A FACTOR

Those pockets of prosperity can't materialize fast enough for the 162,900 Nevadans, including 130,300 Las Vegans, who were unemployed in June.

State economic-development officials charged with bringing new businesses to Nevada say they are trying to create jobs to pick up the slack, but they face obstacles.

They are working hard to create jobs, they say, but huge losses in construction and hospitality overwhelm the gains. Plus, a soft national economy creates weak markets for housing and tourism, as well as uncertainty for employers who might move to or expand in Nevada.

"Things like the housing market, travel trends and other trends in the U.S. economy are beyond our control, but we are working hard day in and day out to send the message that Nevada is a great place to do business," said Lt. Gov. Brian Krolicki, who oversees the Nevada Commission on Economic Development.

What's more, businesses won't invest in relocating or opening new plants unless they're certain that economic recovery will last. Between the nation's lingering economic slump and the debate over the federal debt ceiling, certainty has been in short supply, Krolicki said.

Still, the commission helped 34 businesses expand or relocate to Southern Nevada in fiscal 2011, which ended June 30. The companies created 763 direct jobs, with annual payrolls of $33.5 million and a five-year economic impact of $1 billion. Those numbers don't include the expansion of online retailer Zappos.com, which plans to move from Henderson to downtown Las Vegas in 2012 and expand its workforce of 1,700 today to 3,000 after the move.

"There have been many successes in economic development, and in bringing in new companies and expanding current ones. It's just that sometimes the volume of bad news swamps some of the very great success stories we have had in the last few years," Krolicki said.

Mike Skaggs, executive director of the Economic Development commission, said more job-creation help is on the way.

new initiatives

The state recently boosted the commission's biennial budget from $2.4 million to $7.3 million, and the agency's new board of directors will meet Monday to discuss the findings of an economic-diversification study from the Brookings Institution. The group will begin hashing out details of a skills-training program ranging from kindergarten through college in four or five key areas of economic growth.

Over at the employment department, efforts to put Nevadans back to work are also under way.

The agency's 3-week-old Silver State Works initiative offers financial incentives to employers who train or hire jobless workers.

The department will pay workmen's compensation costs for six weeks for companies willing to train workers. Businesses don't have to hire the workers; the idea is to get them fresh and more marketable skills, said Lynda Parven, deputy administrator of the department's Employment Security Division.

Companies can also opt for reimbursement of up to half of a job seeker's wages during training, and the department will pay employers up to $500 a month for four months if they hire an unemployed Nevadan for at least 30 hours a week.

The program has $8.3 million in funding for incentives, and aims to place about 4,200 jobless workers in positions in the next two years, Parven said.

LIMITS TO INCENTIVES

All of those efforts would still leave more than 150,000 Nevadans jobless, however. Big gains require improved economic certainty nationwide, observers said.

Business-recruiting activity stalled in recent weeks as federal lawmakers argued over how to close budget deficits and whether to cap the country's debt ceiling, Skaggs said.

But early Friday, the economic development commission was contacted about projects that could create as many as 2,000 jobs, Skaggs said.

"We're still on most lists for anyone considering the West Coast," he said. "There's a lot of prospective activity out there."

Skaggs said he also is convinced that once the federal debt impasse is resolved, businesses and consumers alike will start spending and investing, and that will bolster Nevada's labor markets.

"Most people are being very conservative right now. If they felt like they could get some security, they'd be more inclined to buy goods and services, and the manufacturing and distribution of goods and services would be running again," he said. "I think by the time we get to October or November, you're going to see us back on more solid footing, and jobs numbers will start increasing. There is so much pent-up demand."

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