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Best of Liz Benston

Gaming Guru

Liz Benston
 

Unemployment by the numbers

16 January 2008

LAS VEGAS, Nevada -- Gaming stocks are plummeting and Wall Street is frenzied with fears that people are spending much less of their hard-earned cash in casinos.

What especially concerned the investment crowd was November's unemployment figures, which UNLV's Center for Business and Economic Research reported as 5 percent and the state Department of Employment, Training and Rehabilitation (as well as the federal Bureau of Labor Statistics) reported as 5.4 percent.

An increase of forty basis points? Take out your hard hats, the sky is falling!

Well, not quite.

Both the state and the feds report a seasonally adjusted number, which comes to 5.4 percent. UNLV used the same figure for the month of November but removed the seasonal adjustment, resulting in a rate of 5 percent. The Las Vegas economy isn't all that cyclical, UNLV economist Keith Schwer says.

Gambling and tourism are year-round sports here, after all.

The state reports the number to the feds, who audit the figures and release their own numbers. Unlike some states that have inflated their employment statistics, Nevada's numbers have historically been identical, or nearly so, with the feds' audited numbers, Schwer said.

The adjusted November rate of 5.4 percent, up from 5.2 percent in October, is the highest since May 2003. (Nevada's unemployment was generally several points over 5 percent for three years in a row until 2004.)

Historically, any sharp upswing above five percent has signaled the beginning of a recession, Schwer said. But that correlation hasn't always been perfect.

Before you put on that hard hat, consider that employment was up 2 percent in November from a year ago. And consider the Las Vegas Strip resort market –- the state's biggest economic engine.

"Residential construction is in the toilet and construction along the Strip is booming, so on average, we're hanging in there," Schwer said.

Employment will peak in 2009 and 2010, when most of the Strip resorts under construction will be open to the public.

For now, construction jobs don't account for much of the unemployment increase, as residential folks are getting jobs in resort construction. It's the sales side of real estate that's hurting most.