Broader trends in the national economy through the first quarter of 2023 continued to press forward while demand-side indicators remained relatively robust. Consumer confidence has remained relatively stable over the last year; however, the Wall Street Journal’s Economic Forecasting Survey indicates 61% of economists predict a recession in the next 12 months. Similarly, elevated interest rates persist with the latest Fed increase, but other metrics, such as inflation and the home price index, show gradual cooling. The labor market has experienced somewhat mixed results as the first part of the year saw more layoffs in the technology sector. Despite this, overall employment numbers are still positive, and the country currently has the lowest unemployment rate since 1969 (3.1%).
Southern Nevada employment remains near last November’s historical high heading into spring at 1.1 million (March 2023), adding over 56,000 jobs in the past year and reflecting employment gains in nearly every major industry. Leisure and hospitality, education and health services, and professional and business services saw increases of 18,900, 9,400, and 9,200 employees, respectively, which accounted for over two-thirds of the overall year-over-year employment gains in the Greater Vegas area. This positive employment growth (+5.3% year-over-year) continues the sustained increases the region experienced over the last two years.
Although employment continues to rise due to population growth and increasing economic diversification, unemployment remains 2.2 points above pre-COVID levels at 5.7% (March 2023). This is a substantially higher rate than those of nearby comparative metro areas such as San Diego (3.7%), Los Angeles (4.6%) and Phoenix (2.9%). Likewise, there has been an uptick in initial unemployment claims, with a year-over-year increase of 1,584 claims in March.
Despite this, weekly wages in Greater Vegas continue to grow, with the average worker earning $993.25 per week, an increase of 2.6% over the last 12 months. In addition, average weekly hours worked have stayed consistent, holding steady at 34.9 for both March 2023 and one year prior. The inherent challenge of inflation outpacing wage growth remains a concern over the near term.
Although general economic headwinds will likely persist through the end of 2023, the Greater Las Vegas area appears poised to continue attracting talent and supporting local economic growth. Migration from higher-priced housing markets like California continues to pay dividends for the local market. Additionally, notable construction projects and special events catering to a global audience will only raise the bar going forward.