Recovery Is Here? The Strip Feels It, But What About the North?

Nevada’s Department of Employment, Training and Rehabilitation just gave us some (mostly) welcome news to start the week. Our state's unemployment rate fell from 13% in December to 12.7% this past January. Thanks to recent improvement in gaming and tourism on the Las Vegas Strip, those sectors are adding jobs again. However, not everyone is experiencing improvement.

Nevada’s jobless rate fell from a revised 13 percent in December to 12.7 percent in January, down
from 13.8 percent a year ago and a peak of 14 percent in October 2010. The number of
unemployed Nevadans remained relatively flat at 174,700, but is down 16,300 from the same
month last year.

“Employers added a seasonally adjusted 1,800 payroll jobs. It marks the 12th time in the past 13
months that employment has grown on a year-over-year basis,” said Bill Anderson, chief
economist for Nevada’s Department of Employment, Training and Rehabilitation
(DETR). “Nevada’s labor markets continued on a path of moderate improvement in January, but
Nevada’s unemployment rate is 4.4 percentage points higher than the nation’s 8.3 percent.”

Changes in the unemployment rates in the State’s urban areas were mixed in January. In Las
Vegas, the unemployment rate declined from 13.3 percent in December to 13.1. Over-the-year, the
rate is down by 1.3 percentage points. In the State’s northern metro areas, the unemployment rate
increased by six-tenths to 13.0 percent in the Reno-Sparks area and by seven-tenths to 13.5 percent in Carson City. Reno’s unemployment rate is down by 1.2 percentage points from the previous year and Carson City’s is down by one percentage point. The unemployment rate in the Elko area increased from 6.4 percent to 7.3 in January and is down three-tenths from the previous year.

Again, this largely has to do with gaming and tourism. Las Vegas has been recovering there, but the gaming sector has been much shakier in the Reno-Tahoe market. We've been seeing those signs, but now that picture is looking clearer. And it's other reminder that gaming alone can't save us.

This comes back to what we discussed in January about our need to realize Nevada's economy can no longer afford to be a "one trick pony". During the worst of the recession, Clark County was taking the brunt of it because we were most susceptible to the real estate bubble bursting, along with global financial crises drying up tourists' disposable income. But even as economic recovery has brought many of these tourists (and some of their disposable income) back to Las Vegas, Reno continues to suffer as newer gaming destinations (like California's tribal casinos) are eating into a tourist market that used to be almost exclusively Northern Nevada's to tap.

If Governor Sandoval and state business leaders are serious about adding 50,000 jobs in this state in 2012, they have to realize that Nevada can't succeed in that by continuing to be a "one trick pony". Whether it's global turmoil affecting tourism to Las Vegas or new regional competition hurting tourism to Reno or online gaming posing a new threat to everyone, there will always be something that could harm our gaming industry. That's why it no longer makes sense to put all our proverbial eggs into that one basket.