Reno-Sparks Metrics Continue Positive Trends

    With the exception of average weekly wages, which are down over last year on both a nominal and inflation-adjusted basis (“real”), Northern Nevada is trending positive.

    stat highlights

    positive reno

    emp index reno

    The RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks rose to 99.0 in June. When compared to June 2016 the Index is up 1.4 points from 97.6. Our Index continues moving toward the peak and is now less than 1 point away. We expect the general upward trend will continue, maintaining the trajectory that started in 2011. The index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.

    job growth reno

    Reno-Sparks job growth on a 12MMA has been trending downward since November of last year, but did not budge in June 2017, remaining at 4.1%. The rate of growth is 0.4 points lower than that recorded in June 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region has surpassed its previous high mark of 3.7% achieved in December 2006.

    The 12MMA of the headline unemployment rate fell by 0.1 points for the 7th month straight to 4.4% in June 2017. When compared the June 2016 headline unemployment rate of 5.7%, June’s rate was 1.3 percentage-points lower. The unemployment rate continues to improve steadily and is approaching rates seen before the Great Recession.

    u3 reno

    The U-3 and U-6 unemployment rates for Nevada saw healthy improvement in the 2nd quarter of 2017. The U-3 rate was down 0.6 points, from 5.6 to 5.0. The U-6 rate fell from 11.9% in Q1 to 11.5% in Q2. Despite the 0.4-point drop in the U-6 rate, Nevada still has the third highest U-6 rate in the nation, beating only New Mexico and Alaska.

    In terms of the U-3 rate, Nevada is doing better than 13 other states, a considerable change from its previous ranking of 6th highest U-3 rate in the nation.

    yoy reno

    There were 80,042 construction jobs in Nevada recorded for June 2017. Of those, 14,717 were in the Reno-Sparks MSA (12MMA). This is 5.9% more than the 13,892 jobs reported the previous year in June 2016, and 61% of the peak (see below). A strong economy has led to very strong commercial and residential markets in the region. The latest stats show that 6.9% of the region’s job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. The construction sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.

    gross gaming reno

    Washoe County’s 12MMA YOY gross gaming revenue grew by 2% in June 2017. This brings total revenue up to $67.1 million, or 75% of the peak (see below). The growth rate has been positive for 2½ years straight at an average rate of 3.0%.

    Gaming revenues peaked 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.

    taxable retail reno

    Washoe County’s taxable retail sales are being pushed higher by the region’s healthy economy. In May 2017 taxable retail sales reached $662.7 million. This was a 6.4% jump compared to May 2016 on a 12MMA basis. This represents over 5 years of rising retail sales on a YOY basis. Sales have surpassed their previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth in May fell behind an improving state average by a 1.1 percentage-point margin.

    Success in business attraction and retention is driving the region’s economy and is the primary cause of growth in taxable retail sales.

    resales reno

    MLS home resales in Washoe County rose to 551 units in June 2017 on a 12MMA basis. This is an increase in resales of 4.5% over the previous June. For more than 2 straight years now home sales have been rising on a YOY basis. After what was a brief leveling-off, home sales appear to be picking up steam again. The median sales price rose to $317,356 (12MMA) in June, an 8.3% jump from June 2016. For comparison, the Las Vegas median resale price in May increased by 7.2% to $211,724. The looming affordability issue also applies to the resale market.

    avg earnings reno

    The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA remained stuck at $791 in June, though the wage has been trending downward now for the past year, since July 2016. When considered on a YOY basis it is down -4.4% from $827 in June 2016.

    Additionally, the inflation-adjusted 12MMA wage of $685 is $1 less than the previous month’s real wage of $686, bringing it -6.1% lower than the $729 recorded in June 2016. In June, Reno-Sparks’ average weekly real earnings were 2.3% higher than the Las Vegas average of $660, but Reno-Sparks’ advantage continues to shrink. Where Las Vegas’ average weekly real earnings are improving, Reno-Sparks’ are headed in the opposite direction. Inflation-adjusted wages have experienced a significant 6.2% drop from the recent record high in May 2016 of $730.

    avg hours reno

    Weekly hours in the Reno-Sparks MSA ticked up by 0.1 points to 35.8 in June after May’s brief pause in improvement. When compared to June of last year, weekly hours are up 0.7 hours from 35.1. The 8-year peak occurred in October 2008 at 37.1 hours, while the trough (8-year) of 32.5 hours occurred in September 2014.

    fuel reno

    The average price per gallon for regular unleaded gasoline in Reno-Sparks as of August 1, 2017, was $3.01, down just $0.02 (-0.7%) from $3.03 the month prior. However, when compared to the previous year the price of regular unleaded is up $0.33 (12.3%).

    According to AAA, “After notching the biggest one-week draw in nearly two and a half years, West Coast gasoline stocks are at their lowest level in seven months. Stocks tumbled 1.7 million bbl, bringing the region’s supply level to nearly 27 million bbl, according to the EIA. The tumble in stocks paired with potentially lower West Coast refinery runs, due to ongoing maintenance this week, means the regional decline in gas prices could be short lived and gas prices have the potential to increase in the coming days.”

    gold reno

    Per the World Gold Council, the end-of-month spot price of gold (ounce of pure gold) fell by -0.51% in July 2017 to $1,248, on a 12MMA basis. On a YOY basis, the price of gold increased by 5.1%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 12 months.

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