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Despite improvements, Las Vegas economy still struggling

Job Connect: March 27, 2012

Steve Marcus

Tay Lee, 33, reads a book on promoting websites while waiting to meet with a Job Connect representative at the Job Connect offices on Maryland Parkway Tuesday, March 27, 2012. Lee said he has a background in radio and his own computer repair business but was looking for something with a steady paycheck. A new Brookings Institution/UNLV report confirms that while the national economy improves, the Las Vegas economy continues to struggle with high unemployment & stagnant or declining home prices.

Job Connect: March 27, 2012

Nevada JobConnect on Maryland Parkway in Las Vegas. A new report finds that economic recovery in Las Vegas is hampered by a lack of educated workers and reliance on industries most vulnerable to the recession. Launch slideshow »

The Las Vegas-area economy continues to struggle with slow growth and high unemployment, two new reports show.

While the U.S. economy officially emerged from the 18-month recession in June 2009 and has been growing ever since, recessionary conditions persist in Las Vegas with unemployment measured in January at 13.1 percent.

That’s nearly three times the 4.7 percent Las Vegas rate recorded during the economic boom month of January 2007, and it compares to the national rate in January of 8.3 percent.

These numbers show Las Vegas, with its economy dependent on tourism and real estate development/construction, continues to struggle to emerge from the recession.

Even as tourists return to Las Vegas, they are gambling less, and the Las Vegas construction industry is showing signs of life but has yet to rebound.

RCG Economics’ Clark County Job Index for January of 90.1 was up slightly from December’s reading of 90.0 and advanced from January 2011’s 88.4. The index is indexed to a baseline of 100 in December 1998.

''While the index continues to improve month-over-month and year-over-year, it’s largely the result of the local labor force shrinking at a faster rate than the rate of job creation,'' RCG commented, noting the local labor force shrank 14.4 percent between January 2011 and January 2012 while employment grew slightly during that period.

Analysts say the local labor force shrank to about 982,000 people as some people who could work either gave up and dropped out of the labor force or moved from Las Vegas to places with better job prospects.

State statistics show employment in the Las Vegas area grew by about 4,600 jobs on a year-over-year basis for an increase of 0.6 percent through January.

''At least Las Vegas has seen job growth for a number of months,'' RCG commented.

Additionally, state analysts said, the trend of people leaving the job market was more pronounced during the first half of 2011. The situation seemed to be stabilizing at the end of the year as the economy improved slightly.

Separately, Brookings Mountain West released its fourth quarter 2011 Mountain Monitor, which tracks economic activity in Las Vegas and other cities in the Intermountain West like Denver, Phoenix and Salt Lake City.

Brookings Mountain West confirmed that Las Vegas is among the cities in the West that is languishing in national economic recovery rankings.

That’s because, despite unemployment in Las Vegas decreasing 2.5 percentage points in 2011 compared with 2010, the rate is still elevated. And with its stagnant house prices, Las Vegas was the only major city in the region that didn’t see home prices increase during the quarter.

Phoenix, with a more diversified economy, outperformed Las Vegas with home prices rising 3.1 percent in the fourth quarter and employment increasing 0.5 percent during the same period, the Mountain Monitor said.

In new national rankings comparing the 100 largest U.S. metro areas, Brookings said Las Vegas ranked No. 96 in the comparison of changes in employment from the economic peak in the second quarter of 2007.

In that ranking, employment in Las Vegas is down 13.1 percent vs. the average decline nationwide of 4.4 percent.

Overall in the Intermountain West in the fourth quarter, ''signs of a robust, sustained and self-fueling recovery remained elusive,'' wrote analysts at Brookings Mountain West, a partnership of UNLV and the Brookings Institution.

Brookings, an influential think tank, lately has been promoting the benefits of diversifying the Nevada economy and boosting state exports with targeted investments in specific initiatives.

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