Reno-Sparks Job Growth is Slowing

    Most economic metrics in Northern Nevada remain positive, but job growth continues to trend downward, falling 0.3 points in August from 3.9% to 3.6%. The rate of growth is 1.2 points lower than that recorded in August 2016.

    All the latest numbers are below.

    r stat highlights

    r positive

    r new jobs

    The FY2017 final results for EDAWN-assisted new jobs were adjusted to 3,323 jobs. This is a 3.8% improvement over the number of assisted new jobs in 2016. The FY2018 forecast also predicts 2,500 new jobs, a considerable drop from previous years. EDAWN’s latest data supports its success in enabling job growth and diversification. Note: These figures do not include jobs related to Tesla.

    r emp index

    After stalling in July, the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks ticked up by 0.1 points to 99.1 in August, resuming its general upward trend. The pace at which the Index has been increasing might slow since it is now just 0.7 points away from the record high. The Index is up 1.3 points since August 2016. The Index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.

    r headline unemp

    Reno-Sparks job growth on a 12MMA continues to trend down, falling 0.3 points in August from 3.9% to 3.6%. The rate of growth is 1.2 points lower than that recorded in August 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region had surpassed its previous high mark of 3.7% achieved in December 2006, but has now fallen back down below this number.

    After falling for 8 months straight, the 12MMA of the headline unemployment rate held at 4.3% in August 2017. When compared to the August 2016 headline unemployment rate of 5.5%, this August’s rate was 1.2 percentage-points lower. The unemployment rate continues to improve steadily and is approaching rates seen before the Great Recession.

    r yoy constr

    There were 81,817 construction jobs in Nevada recorded for August 2017. 14,908 of those were in the Reno-Sparks MSA (12MMA). This is 5.4% more than the 14,142 jobs reported the previous year in August 2016, and 62% of the peak (see below). Reno’s healthy economy has produced strong residential and commercial markets in the region, and this continues to benefit the construction sector.

    The latest stats show that 7.3% of the region’s job-base is in construction, up 0.1 point from last month. 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.

    r visitor

    There were 422,595 visitors to Washoe County in August on a 12MMA basis. YOY growth in visitation to Washoe County continues to outpace growth in Clark County, where visitor growth is trending down. In August 2017 YOY growth was 4.5%, an increase from the 3.6% concerning the year period ending in July 2017. By comparison, the YOY growth rate in Las Vegas for the month of August was -0.3%. Reno had been lagging behind Las Vegas in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe County beating those of Clark County every month since June 2016.

    Washoe County has now seen YOY growth in visitor volume every month for over 2½ straight years, since January 2015, at an average rate of 2.6%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains.

    r gross gaming

    Washoe County’s 12MMA YOY gross gaming revenue grew by 2.3% in August 2017. This brings total revenue up to $67.9 million, or 76% of the peak (see below). The YOY growth rate has been positive for just over 2½ years straight at an average rate of 2.9%.

    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.

    r taxable retail

    Washoe County’s taxable retail sales continue to rise higher, a boon of the region’s strong economy However, the YOY growth rate has been dwindling, from 10.7% for the year period ending in January 2017 to 5.6% for the year period ending in July 2017. Taxable retail sales reached $668.7 million in July. Sales have surpassed their previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth in June fell behind an improving state average by a 1.7 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.

    Note: It will be interesting to see how adult-use marijuana sales will pan out relative to the taxes it will generate. The first of month of reporting occurred this July. While still small relative to Nevada’s revenue-base, starting next month, we will begin tracking the contribution that these sales is making to the base.

    r home resales

    MLS home resales in Washoe County rose to 567 units in August 2017 on a 12MMA basis. Compared to August 2016, this is an increase in resales of 7.0%. For more than two straight years now home sales have been increasing on a YOY basis, and the rate of growth now appears to be on the rise. After what was a brief leveling-off, home sales have picked up steam again. The median sales price rose to $323,939 (12MMA) in August, a 9.1% jump from August 2016. By comparison, the Las Vegas median resale price in August increased by 8.2% to $215,982. The looming affordability issue also applies to the resale market.

    r weekly earnings

    The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA increased by pennies (0.04%) in August, not enough to move it past the $792 recorded last month. Despite the small increase, this is the second consecutive month where growth was positive, a good sign after 11 months of negative growth. When considered on a YOY basis the unadjusted weekly wage is down -3.3% from $819 in August 2016.

    The inflation-adjusted 12MMA wage of $683 is $1 less than the previous month’s real wage of $684, bringing it -5.2% lower than the $721 recorded in August 2016. In August, Reno-Sparks’ average weekly real earnings were 2.6% higher than the Las Vegas average of $665, 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 6.4% drop from the recent record high in May 2016 of $730.

    r weekly hours

    Accompanying a decreasing weekly wage in the Reno-Sparks MSA are stagnant weekly hours, which in August were unchanged from the previous month at 35.9. However, the overall trend since September 2014 has been upward. When compared to August of last year, weekly hours are up 0.7 hours from 35.2. The 8-year peak occurred in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours occurred in September 2014.

    r fuel

    The average price per gallon for regular unleaded gasoline in Reno-Sparks as of October 13, 2017, was $3.05, down $0.12 (-3.9%) from $3.17 the month prior. However, when compared to the previous year the price of regular unleaded is up $0.29 (10.4%). For comparison, gas in the Reno-Sparks MSA is $0.38 more expensive than in Las Vegas.

    According to AAA, “Gasoline inventory levels reached a 4-month high, according to EIA’s latest report, growing to 29.3 million bbl. The increase is a surprise given planned maintenance at various refineries and healthy exports in the region that were expected to keep inventory growth low. Additionally, despite dropping from last week, the refinery utilization rate of crude remains high at 88.3 percent in the region. The utilization rate is likely to climb back up, as more refineries return to typical production rates when scheduled maintenance is completed.”

    r gold

    Per the World Gold Council, in September the end-of-month spot price of gold (ounce of pure gold) fell $3 (-0.26%) to just under $1,246 on a 12MMA basis. After 14 straight months of increasing gold prices, 4 of the last 6 months have seen prices fall. On a YOY basis, the price of gold is up 2.1%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 13 months, though the YOY growth rate has been trending down.

    r adult working

    Various sources often report employment-to-total population ratios, but that metric muddles the true ratio of workers to working-age population, because U.S. society is aging and the share of non-retirees is shrinking. Therefore, we present the employment-to-adult-working-age population ratio. This relates jobs the population cohort that is actually expected to work. It more accurately describes the employment situation in the region.

    This chart shows that the region’s employment-to-adult-working-age population ratio for 2016 increased slightly from 2015. The most recent ratio is just short of the 2007 peak. It went as low as .52 during the depths (2010) of the Great Recession.

    Print-friendly Version