Wednesday, Sept. 14, 2011 | 9:01 p.m.
Although Las Vegas suffers with one of the weakest economies of U.S. cities, there was a smattering of good news on employment and the value of goods and services produced for the three-month period ended June 30.
In its quarterly Metro Monitor economic report released tonight, the Brookings Institution think tank in Washington reported that Las Vegas enjoyed a 1.1 percent increase in its gross metropolitan product. That ranked the city third in the nation for the increase — behind Houston and Austin, Texas — and nearly triple the national average.
Las Vegas had a 1.5 percentage-point drop in unemployment from June 2010 to June 2011, the third-largest decrease in the nation, behind Grand Rapids, Mich., and Youngstown, Ohio. That was more than triple the national average. And Las Vegas witnessed improvement in employment by 0.4 percent from April through June, ranking 40th among the nation’s top 100 metropolitan areas.
“The story for the first time becomes somewhat encouraging for the region,” Brookings senior fellow Mark Muro, policy director for its Metropolitan Policy Program, said today. “We’re seeing several positive figures, not just one isolated improvement. The gross metropolitan output was one of the strongest in the country. But the tepid recovery is ... not translating to substantial employment growth because companies have become so lean. The gaming industry is not unique in finding ways to grow output without hiring substantially.
“The question is, when will output growth lead to more hiring? That’s one of the great questions facing the economy.”
The bright spots in the Brookings report didn’t surprise Jeremy Aguero, a principal with Applied Analysis, a Las Vegas advisory firm. He said there have been encouraging trends in Southern Nevada in recent months, including more tourists and higher sales tax and gaming revenue.
“This is showing us that consumers are consuming again,” Aguero said. “We’re getting back to the business of business in Las Vegas.”
The bad news is that Las Vegas still has among the nation’s worst numbers for unemployment and gross metropolitan product. The metro area also ranks at or near the bottom in housing.
Put it all together and Las Vegas remains among the nation’s 20 weakest-performing metros, 15 of which are in California and Florida.
“State capitals and other government or military centers generally had the lowest unemployment rates, while unemployment rates were generally highest in the California, Nevada and Florida metropolitan areas that experienced a house price boom and bust,” wrote Howard Wial and Richard Shearer, co-authors of the report.
Brookings calculated that Las Vegas as of June was still 13.4 percent below its pre-recession employment peak in 2007, ranking 96th. And its unemployment rate, 13.8 percent in June, was exceeded by only five metros in a month when the national rate was 9.3 percent.
The city’s gross metropolitan product as of June also remained 12.8 percent below its pre-recession peak, ranking 97th nationally, compared with a 0.4 percent gain nationwide.
“Across the board, the region clearly is still deep in a hole,” Muro said.
Aguero said the data indicate the worst of Southern Nevada’s employment woes may be behind us. Indeed, Brookings calculated that Las Vegas witnessed slight job growth in the first two quarters, the first time that occurred since the Great Recession began in late 2007.
“There are some signs we’re recovering but we’re not out of the recession,” Aguero said.
Real estate results remain anemic, with Brookings finding that housing prices in Las Vegas slumped an additional 9.4 percent in the second quarter, worst in the nation. As of June, housing prices were 19.6 percent lower than the previous year and 64.5 percent below their pre-recession peak, ranking Las Vegas 99th in both categories. Las Vegas also had the nation’s highest rate of bank-owned properties at 14.2 per 1,000, and exceeded all but three other cities in the rate with which its bank-owned housing inventory grew over the last quarter.
“The persistence of the foreclosure crisis in Southern Nevada is an epidemic that has been a drag on the economy,” Muro said. “This is still an unresolved problem.”