The State of the Economy

From the Las Vegas Review-Journal:


CARSON CITY -- Unemployment in Nevada will jump to an average monthly rate of 8.6 percent next year and remain at that rate in 2010, state economists told the Employment Security Council on Thursday.

"This is sobering news," Employment Security Division Administrator Cindy Jones said after economists on her staff made the prediction.

The forecast came on the same day an economic analyst told another state panel that Nevada is in a recession and the outlook won't improve in the short term.

"The recession is already here, in our opinion," James Diffley, director of the U.S. Regional Services Group of Global Insight, told a the Economic Forum. "We have been arguing all year Nevada is in a recession."

The Economic Forum, made up of five private citizens, must tell Gov. Jim Gibbons by Dec. 1 how much money he can spend on the 2009-11 state budget. Thursday's meeting was the first for the panel to start preparing those projections.

If Nevada's unemployment reaches 8.6 percent in 2009, it would be the highest rate since 9.7 percent in 1983. The state's jobless rate in August was 7.1 percent, the highest in 23 years.
Bill Anderson, the state's chief economist, made the jobs predictions as he pointed out that Nevada two years ago had unemployment rates of just over 4.0 percent and led the nation in job creation.

Anderson and economist David Schmidt said the state economy has been sputtering because of the crash of the real estate market, the decline in home values and the reluctance of residents to spend what money they have.

Anderson said that in the past, employment jumped dramatically after the opening of each megaresort in Las Vegas, but this isn't happening anymore. The City Center project on the Strip is expected to employ 12,700 people when it opens in November 2009, but the state's jobless rate will increase even with this project, he said.

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