Taxable sales jump 7.6 percent; Clark County up 8.1 percent

Nevada's consumers came out in force in August, continuing a spending trend that dates back two years.

And though the state has a long way to go on the road to recovery, observers say the newest taxable sales numbers show the economy remains on track toward better times.

Sales of tangible goods by retailers and businesses grew 7.6 percent, to $3.67 billion, year over year in August, the state Department of Taxation reported Thursday. Sales in Clark County jumped 8.1 percent, to $2.59 billion.

Nevada and Clark County have posted a string of taxable sales increases going back to mid-2010, when the indicator began rising 5 percent to 10 percent year over year each month.

"Consumer spending has actually been pretty strong," said Ryan Kennelly, an economic analyst with the Center for Business and Economic Research at the University of Nevada, Las Vegas. "It's one of the bright spots of our economy."

Some spending categories were especially bright in August.

Countywide sales among dealers of cars and car parts jumped 22 percent year over year in the month. Clothing and accessories sales gained 10 percent. Sales inside general merchandise stores, such as department stores, grew 5.6 percent. Merchant wholesalers of big-ticket items such as office equipment and appliances showed a 12 percent sales improvement. Sales inside bars and restaurants - the biggest local consumer category, at 26.3 percent of all spending - ticked up 2.2 percent.

Even construction-related sales increased 7.1 percent.

Brian Gordon, a principle in local research firm Applied Analysis, said the gains were "fairly impressive," outpacing growth in incomes and population. Especially strong purchases of durable goods such as cars and clothing also suggest a change in spending profiles, he said.

Where prerecession budgets included plenty of discretionary cash for dining out and gambling, today's shoppers focus on replacing older cars and clothing that might need upgrading.

Overall, August sales in Clark County were up 16.1 percent from their low for the month of $2.24 billion in 2009. But they were also still 14.2 percent below their August peak of $3.03 billion, reached in 2008. That means the county has clawed back about half of the sales base it lost in the downturn.

Kennelly called the recovery "pretty healthy" considering that unemployment statewide and locally remains above 11 percent. Improved sales could be coming from slightly increasing incomes and rising home prices, both of which may ease concerns about spending, he said.

What's more, sales probably overcorrected in the downturn, plummeting more than necessary as consumers braced for job and equity losses, Gordon said. Now, with housing prices ending their free-fall and employment growing modestly, the economy has stabilized enough to encourage spending.

"Consumers appear to be crawling out of their holes and returning to a more normalized rate of consumption," he said.

But consumer confidence is still subpar, perhaps because of uncertainty over the Nov. 6 election and the looming fiscal cliff of federal budget cuts and tax increases set to kick in after Jan. 1, Kennelly added.

Expect sales to increase during the holiday season, as they always do, Kennelly said.

Don't look for huge gains, though: Kennelly said he expects sales to stay on their current pace, growing modestly, without any big jumps or dips.

Gordon projected sales increases in the mid-single-digit percentages in coming months.

Gross revenue collections from taxable sales, which help fund public services including prisons and schools, totaled $288.2 million in August, up 8.5 percent from a year earlier.

Contact reporter Jennifer Robison at jrobison@review journal.com or 702-380-4512. Follow @J_Robison1 on Twitter.