We won’t have Michigan to kick around much longer.
Michigan, long the nation’s paragon of economic decay, has a jobless rate of 15 percent, and local experts say it could be just a matter of time before parts of Nevada approach the Great Lakes State’s unemployment rate.
In early 2009, Nevada economists projected a jobless peak of 11 percent to 11.5 percent. But unemployment blew past those forecasts, reaching 12.5 percent statewide and 13.1 percent locally in July, the state Department of Employment, Training and Rehabilitation reported Friday.
Next and final stop? Depending on who’s prognosticating, it’s somewhere in between 13 percent and 15 percent.
Jered McDonald, an economist with the employment department, said his agency is working on a new round of projections. He doesn’t yet have a concrete target, but he said he expects statewide joblessness to top out between 13 percent and 14 percent sometime in the spring.
Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, said Las Vegas jumped from 12 percent to 13 percent far faster than he anticipated, so Las Vegas could well see another full percentage point tacked onto the current rate.
And Jeremy Aguero, a principal in local research firm Applied Analysis, said 15 percent “certainly isn’t out of the question” by the end of 2009.
Few Nevada industries are poised for expansion, Aguero said. In fact, some of the state’s biggest employment sectors are set for additional job losses through year’s end. Take construction: About 9,500 laborers will lose their jobs when building concludes at CityCenter in December. Nevada had 125,000 construction jobs at its peak two to three years ago.
That number is down to 90,000 and falling. With no new major resort or commercial projects on the drawing board and fewer than 400 housing permits issued in Las Vegas per month, the state has few options for replacing the lost positions.
Schwer said he’s also concerned the nation’s slump in discretionary spending could be permanent. Consumers, burned by high debt, might hang on to their newfound miserly ways — the country’s average savings rate skyrocketed from zero in 2008 to 7 percent now. And the Cash for Clunkers car-buying program likely absorbed substantial amounts of discretionary dollars.
“People may not spend on travel to Las Vegas, or if they do, they will spend less,” Schwer said.
Growth will have to return to the national economy before expansion revisits Nevada, said Bill Anderson, chief economist for the state employment department. And there, at least, a few positive indicators have materialized: The gross domestic product isn’t shrinking nearly as quickly as it did a couple of quarters ago, unemployment fell from 9.5 percent to 9.4 percent between June and July and housing starts rose 3.6 percent in June.
Observers said they don’t expect joblessness in Nevada to stabilize in 2009.
Schwer said unemployment here could stop growing in mid-2010 if the nation’s nascent recovery holds through the end of 2009. Aguero said unemployment in Nevada could level off in the fourth or first quarters following the late-2009 openings of projects including CityCenter, the Hard Rock Hotel’s expansion, Planet Hollywood’s addition and the Hard Rock Cafe on the Strip.
Returning to single-digit joblessness will take considerably longer, though.
Conservative estimates from Applied Analysis forecast statewide unemployment of 9.9 percent in the third quarter of 2011.
Contact reporter Jennifer Robison at firstname.lastname@example.org or 702-380-4512.