Economist: Las Vegas economy has further to fall

By Buck Wargo

Thursday, Jan. 15, 2009 | 9 a.m.

It’s bad and getting worse.

That’s the description of the Las Vegas economy from UNLV economist Keith Schwer, the director of the Center for Business and Economy.

Schwer released the center’s Southern Nevada Index of Leading Economic Indicators, which showed a continued downward trend that suggests the economic slowdown won’t abate during the first half of the year.

“There are some people doing as well off as a couple of years ago and some people’s financial positions have improved, but for most people they have either lost jobs, have fewer hours or smaller tips,” Schwer said.

Any improvement in the local economy will eventually show up in the data, which Schwer said would show itself by bottoming out six months prior to the economy showing improvement. He has already predicted the state jobless rate will hit 10 percent this year, up from 8 percent in November.

The December index showed a 0.2 percent decline from November and a 3.3 percent decline from December 2007. Much of the drop is attributed to gross gaming revenue in October falling 11.25 percent from September.

The index also dropped because of a decline in retail sales, down 3.63 percent, and steep declines in commercial and residential construction.

Schwer said he holds out hope that the local economy could start to turn around by the end of the year or first quarter of 2010 at the latest.

For now, the future, in part, depends on what happens in Washington, D.C., with a proposed $800 billion plus stimulus package. There is a proposal to decrease the withholding tax of workers and put more money in their paychecks to spend.

“Our future depends on what happens in Washington and when they are able to get the stimulus package out,” Schwer said. “We depend on people coming here and spending their money. If they don’t have jobs, they are not going to come here.”