Workers pour into Nevada labor pool, sending jobless rate up

They’re back, and they’re looking for jobs.

New and returning workers poured into Nevada’s labor pool in January, pushing up the state’s unemployment rate even as job growth soared, the state Department of Employment, Training and Rehabilitation reported Thursday.

The number of people seeking work in the state reached its highest level since 2008, growing by 1 percent, or 14,500, to 1.4 million from December to January. That’s compared to growth of 0.3 percent, or 4,200 people, a month earlier.

At the same time, Nevada’s January jobs count nearly hit a seven-year high, at 1.22 million positions.

Put both trends together, and joblessness rose to 7.1 percent, up from 7 percent in December, though January’s figure was down from 8.5 percent in January 2014.

The Las Vegas rate jumped to 7.5 percent, compared with 7 percent in December and 8.8 percent in January 2014. Local rates are not seasonally adjusted and can be more volatile than statewide rates.

While it’s rarely positive when jobless rates increase, experts said January’s gain isn’t necessarily problematic.

“It’s not bad news at all. The unemployment rate ticked up for a good reason,” said Bill Anderson, chief economist of the employment department. “As the labor market has improved, it’s acting as a signal to people that their likelihood of finding a job is improving. As a result, we are starting to see people re-enter the labor force.”

Employers statewide created 6,700 jobs from December to January, making it the 49th straight month of year-to-year gains. That job-formation rate of 3.6 percent is well above a national growth rate that’s been trending at around 1.5 percent, but state officials won’t know until Tuesday how it ranked nationally. Nevada’s 3.7 percent growth in December ranked No. 3, behind North Dakota and Colorado.

CONSTRUCTION A LEADER

As it has since early 2014, construction led all other major industries in rate of growth, with a jump of 7.9 percent, or 4,600 jobs, year over year. The sector wrapped January with 62,700 jobs. That was up 34.3 percent from a 2012 low of 46,700 positions, but less than half of a 2006 peak of 148,000.

For sheer numbers, leisure and hospitality grew the most, adding 16,600 jobs year over year, for a growth pace of 5.2 percent. The state had 338,800 positions — 27.7 percent of its jobs base — in the sector in January.

Applied Analysis Principal Brian Gordon noted that Southern Nevada’s leisure and hospitality employment hit an all-time high in the month, at nearly 279,900. The prior peak was roughly 276,000 positions in mid-2007.

Gordon traced the improvement partly to new openings, such as SLS Las Vegas in August. But he also said operators are returning to “normalized levels” of employment. In the drive for efficiencies during the recession, the number of leisure and hospitality jobs per hotel room in Southern Nevada dropped to 1.67 in 2010, after peaking at 2.07 in 2007. The rate is now at 1.86 jobs per room.

Nevada’s jobless rate was still noticeably above the national rate of 5.7 percent. Still, the gap has narrowed to less than 2 percentage points, down from more than 4 percentage points in the downturn.

That narrowing should continue, observers said.

People will continue to enter the state’s work force. But with 40,000 estimated new jobs in 2015, Anderson said he expects unemployment to keep dropping, though more “moderately” than in recent years.

“I would think we won’t be losing ground,” he said.

Gordon agreed.

Nevada’s population growth has picked up as economies nationwide have improved and people have become more mobile. That trend should stick through the year, but job growth should ultimately outpace increases in the labor pool, Gordon said.

“The fundamentals appear to be stronger than they were just a few short years ago,” he said.

REVISED 2014 NUMBERS

Stronger-than-expected growth in the labor force also pushed up revised unemployment numbers for all of 2014.

After annual revisions, 2014’s state unemployment averaged 7.8 percent, up from the 7.7 percent originally reported.

Thursday’s numbers did not include discouraged workers who have abandoned seeking jobs or underemployed part-timers who would rather work full-time. Add in those workers, and Nevada’s jobless rate averaged 15.3 percent in 2014, according to the U.S. Bureau of Labor Statistics. The national average was 12 percent.

The figures did show a significant drop in long-term unemployed. The state’s share of people without a job for 27 weeks or more averaged 2.9 percent in the 12-month period ending in January. That was down from roughly 7 percent in 2011, though nearly triple the pre-recession rate of less than 1 percent.

Contact Jennifer Robison at jrobison@reviewjournal.com. Find on Twitter: @J_Robison1.