Recently, a domino-effect of high inflation, rising interest rates and declining gross domestic product (GDP) created a greater concern for broader economic contraction. Prices have exponentially increased over the course of the past year with the consumer price index reaching a 40-year high annual growth rate of 9.1 percent in June 2022. To combat this growth, the Federal Reserve has increased interest rates four times since the beginning of the year. The greater concern was the second consecutive quarter of national GDP decline. While the historical rule of thumb regarding recessions being signaled after two consecutive quarters of negative GDP growth may still apply, employment trends would suggest otherwise.
Despite national economic turmoil, the Southern Nevada labor market has fared quite well. Total employment has increased for 16 consecutive months, reaching 1,060,300 jobs in July 2022. Compared to the prior year, 62,600 jobs have been added to the overall labor market. Within the aggregate number, three industries comprised a majority of the growth. Leisure and hospitality gained 22,200 jobs in the past year (35.5 percent of overall growth), followed by professional and business services adding 14,700 jobs (23.5 percent of overall growth) and trade, transportation and utilities creating 12,800 jobs (20.4 percent of overall growth).
Along with job market growth, workers are earning more than ever before. The average weekly wage for Southern Nevada experienced 14 consecutive months of year-over-year increases, peaking at $992 in July 2022. Furthermore, average weekly wages were 8.5 percent higher in July 2022 than the prior year and 15.5 percent higher compared to pre-COVID levels.
Unemployment in Southern Nevada has fluctuated throughout the year. The unemployment rate dipped to its lowest post-COVID level of 5.0 percent in March 2022. However, the latest data revealed the rate increased to 5.6 percent in July 2022, partially driven by more workers entering the labor pool. Additionally, there was a slight uptick in statewide initial unemployment insurance claims in June 2022, increasing from 7,968 claims in May 2022 to 8,489 claims in June 2022. Even so, these metrics are considerably lower than they were a year ago. Southern Nevada’s unemployment rate is down 2.8 percent from July 2021 and initial unemployment insurance claims dropped by 17.2 percent from June 2021 (latest available data).
Overall, steady growth in total employment, along with gains in Southern Nevada’s key economic industries, demonstrates that the local labor market remains relatively efficient. Another positive is that Southern Nevada wage growth is outpacing that of the national average. Employers continue to face challenges finding qualified talent to meet their needs. Importantly, companies have managed to do more with less, and efficiencies have allowed for improved operational results despite the disruption caused by the current job environment. The outlook for Southern Nevada in the next few months will be a confluence of the vitality of the national economy and the local response to the constantly changing operating dynamics.