Hint of hope

Fri, Nov 27, 2009 (3 a.m.)

Nevada’s unemployment rate dropped three-tenths of a percentage point in October from the previous month, which is the first monthly decline in four years. In Clark County the unemployment rate dropped from 13.9 percent to 13 percent.

Before you celebrate, consider that state economist Bill Anderson said that although this is good news, “it is not a reason to be overly optimistic.”

Anderson said the decline in unemployment was more because of a “stagnant or declining labor force” than any economic growth. Although the economy is showing signs of stabilizing, unemployment will likely rise again as Nevada trudges through the poor economy, according to Anderson.

One reason for the gloomy forecast is that tourism, which drives Nevada’s economy, has taken a beating. People across the country have cut travel expenses. As Richard N. Velotta reported in last week’s In Business Las Vegas, the tourism industry has shown some improvement but is still struggling. For example, although convention attendance and visitor volume were up in Clark County in September for the first time in more than a year, room rates and gaming revenue were still declining.

Anderson warned that consumers will likely be cautious. “As a result, Nevada may lag the national rebound, given the relatively important role that consumer spending, especially discretionary spending, plays in our economy,” he said.

Given the length and the severity of the recession, it is right to be cautious. One month with a few positive numbers doesn’t mean the nation has reached bottom or turned things around. Still, it is encouraging to see even a glimmer of good news. It gives us hope that better days are ahead.