Tuesday, Sept. 3, 2002 | 11:09 a.m.
LOS ANGELES -- The U.S. and Las Vegas economies are proving more resilient after the Sept. 11 terrorists attacks than first predicted, a study released Friday said.
The attacks will mean that about 673,100 fewer jobs are created nationwide this year in industries directly impacted by the attacks.
That figure represents 73,100 fewer losses than estimates first made in January by the Milken Institute.
In addition, growth of real gross domestic product in 2002 will be about $9.4 billion, or 0.7 percent higher than first predicted in January, the Santa Monica-based economic think-tank said.
Ross DeVol, director of regional and demographic studies at the Milken Institute and author of the report, attributed the improved figures to a number of factors.
The assault on Al Qaeda forces in Afghanistan went better than expected. As a result consumer confidence remained relatively strong, he said.
At the same time, low interest rates allowed many homeowners to refinance mortgages and free up disposable income. Zero-interest financing offered by auto manufacturers lured many Americans to the showroom.
Personal income tax cuts also jacked up the level of discretionary spending, while the government's higher defense spending helped stoke the economy further, he said.
DeVol said job losses have been fewer than anticipated in all of the five cities most affected by the attacks -- New York, Los Angeles, Chicago, Las Vegas and Boston.
New York will see 124,000 fewer jobs created as a result of the attacks, down from the 149,000 first expected.
Las Vegas, first predicted to have the greatest percentage job loss of any city, has benefited from a large number of vacationers driving to the city. It will have about 29,000 fewer jobs because of the attacks, rather than the nearly 41,000 loss first expected, the study said.
The attacks will still mean a 2.6 percent decline in jobs in the Reno area and a 3.7 percent fall in the Las Vegas area, the study by the Milken Institute estimates.
That's down from January, when the Santa Monica, Calif.-based economic think tank forecast a 3.1 percent job drop in the Reno area and a 5 percent decline in Las Vegas.
Nevada economists weren't surprised by the improved figures.
"The bottom has not fallen out of the Reno or Las Vegas markets," said Jim Shabi of the Nevada Department of Employment, Training and Rehabilitation.
"It's not coming back as quickly, but I think we've seen in general that a lot of the fallout has been less drastic than people feared," he said.
In the month or so after the Sept. 11 attacks, the unemployment rate climbed from 4.9 percent to 6.7 percent in the Las Vegas area and from 3.6 percent to 3.7 percent in the Reno area.
In July, the unemployment rate stood at 4.4 percent in the Reno area and 5.8 percent in the Las Vegas area.
The revised numbers, however, showed that the nationwide impact of the attacks on the travel, tourism, air transportation, hotel and amusement sectors remains severe.
With between 20 percent and 25 percent fewer foreigners visiting the country this year, the number of new jobs created in the amusement and recreational sector is expected to decrease by 118,700. That's 18 percent more than the 100,400 first expected, the study said.
Air transportation will see about 86,900 fewer jobs because of the attacks. The lodging industry will see 123,300 less jobs, and restaurants and bars will be down about 135,600 positions this year.
All are large numbers but slightly lower than first expected, the study said.
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