More LV job cuts expected despite improved U.S. economy

Ulf Buchholz

Kohl’s at Grand Canyon Drive and Flamingo Road is one of three Kohl’s stores that opened last month in Southern Nevada. The store openings created 450 jobs.

By Nicole Lucht (contact), In Business reporter

Fri, Oct 16, 2009 (3 a.m.)

More stories about business and the economy

The U.S. recession may be over, but Las Vegas employers are still cutting jobs and will continue to do so despite signs of national economic growth, experts said.

Las Vegas lost 60,400 jobs since August 2008, according to August statistics, the most recent figures available from the state’s Employment Department. The statewide unemployment rate is 13.2 percent, and the Las Vegas rate is 13.4 percent, both records.

The dismal local employment picture persists despite an improving national economic outlook. A survey of 44 economists by the National Association for Business Economics released Oct. 12 said “the Great Recession is over.”

But despite gains in the gross domestic product, corporate profits and business investments, more than half the economists surveyed said job losses are not expected to be “fully reversed” until 2012. A third said job losses wouldn’t be reversed until 2013, and 5 percent said it would take even longer. Only three economists think the jobless rate will return to precession levels before 2012.

The unemployment rate is generally considered a lagging economic indicator.

Companies first have to assess whether their business levels are coming back, said Arte Nathan, a human resources expert and owner of Strategic Development Worldwide.

“People have used the mantra of doing more with less for the past year and are going to do more with less,” Nathan said.

As business levels increase, employers will decide whether they need to add more workers, he said.

In industries such as tourism and hospitality, core components of Las Vegas’ economy, Nathan said the recession “has shaken the confidence of everybody.”

Employers will be “conservative and cautious as long as they have to be,” he added.

But to look at job creation on a global, national or even local level can be tricky. Adding to a workforce is an individual decision and not even tax incentives or government subsidies can be counted on to move employers to hire, he said.

Although some economic indicators are showing improvement, that doesn’t mean growth will be felt on Main Street, said economist John Restrepo, principal of Restrepo Consulting Group.

“Because of financially battered consumers constraining spending, additional job losses — locally and nationally — are likely in the months to come,” Restrepo said by e-mail. “It’s our view that businesses will continue to reduce payrolls because of dormant consumer demand for products and services into 2010. This means that our local recovery will be a tepid one.”

Then there is the possibility of what economists term a W-shaped recovery, Restrepo said. Instead of the recession bottoming out and returning to strong economic growth — a V-shaped recovery — the growth would be short-lived, with another drop before a strong recovery.

Even though job losses outpace new hires in Southern Nevada, some companies have expanded during the recession. Kohl’s, taking advantage of clothing retailer Mervyn’s failure and abandoned retail space, opened three stores last month in Las Vegas, hiring 450 people. CityCenter, nearing completion, is filling 12,000 positions, although many workers are transfers from other MGM Mirage properties,

Business growth will depend on people opening their wallets, but consumers and businesses will be more focused on rebuilding savings accounts and balance sheets than on discretionary spending, Restrepo said.

The state isn’t optimistic companies will slow layoffs, either.

The Employment Department extended its unemployment claims filing hours for two Saturdays this month to accommodate the demand.

“Signs of stabilization in the national economy are beginning to emerge,” Bill Anderson, the department’s chief economist, said last month. “Some analysts even argue that the recession is likely over, or will be over in the near term. However, such positive conclusions cannot be drawn in Nevada, based upon a current assessment of labor market and economic activity in the state.”

Discussion: 11 comments so far…

By nednougat

10/17/09 at 6:04 a.m.

Suggest removal

Sad that the jobs mentioned are low pay retail and casino jobs dependent on begging for tips. Until we get a true employment base, this town will stay in the dumps. Goodbye, construction workers. You were the base of our economy, and now, even your shill Steve Ross can't get you a job. Go get the UHaul, and head back east. Don't forget the flannels....
By Bob635

10/17/09 at 7:01 a.m.

Suggest removal

There are no future good paying manufacturing jobs. They have all been shipped to China, Japan, Taiwan, Mexico, Brazil, etc.

The goal to destroy the middle class is succeeding.

Feudalism is the US economy of the future. Just like 3rd world countries.

The Rich have all the power and money. 20 Trillion dollars more than before Reagan and the republicans took over.

Face it, the american dream was an illusion to get people to go into debt so any savings or assests could be totally wiped out- and they were.
By GrandmaCrabby

10/17/09 at 7:51 a.m.

Suggest removal

Have Nicole Lucht and Brian Wargo been introduced? They're pretty much writing the same story, based on comments from the same source. Did they both get the same email from the guy? Could the two stories have been combined into one, with a dual byline? After all, newspapers are suffering and we need to look for efficiencies.
By markp

10/17/09 at 8:38 a.m.

Suggest removal

when did the recession end?

is this the imagination of the reporter or based on figures released from the government the reporter has privy to?

after all the only people saying the recession is over is from a survey!!!!
By vegasm

10/17/09 at 9:28 a.m.

Suggest removal

Las Vegas exists almost entirely upon an economy where discretionary, disposable cash can be squandered on alcohol, overpriced entertainment and gambling.

When discretionary cash dries up and the tourists no longer come, what do you have left to offer?

Las Vegas has never attempted to attract non-gaming industries, but rather assumed the Golden Goose would live and produce forever.

A simple recovery is not going to help; we need a recovery so strong American and foreign tourists once again feel safe spending cash on extravagant vacations.
By chazbean

10/17/09 at 10:21 a.m.

Suggest removal

The recovery is not going to happen here for 5 years. All these statistics are meaningless. Whoever said that the recession is over is working and has a good job.To get a good handle on the recession just ask working class people ( Baker, plumber, teacher, carpenter, nurse, waitress) . These people will give u a better idea.I like how they give u the unemployment figures. They are way underestimated by not including people that have given up looking, or those that are underemployed and people working for cash. The more realistic figure would be about 20%. How is the Tarp money working ? Have u seen any of it? We are in for a horrible 3 years.
By rejco100

10/17/09 at 11:47 a.m.

Suggest removal

Even the slot machine manufacturing is being outsourced to Asia.
By rejco100

10/17/09 at 11:54 a.m.

Suggest removal

The "Recession is Over" campaign is only to entice the last remaining people with a little spare cash/credit to use it before All SHTF!
By gmag39

10/17/09 at 12:44 p.m.

Suggest removal

vegasm, right on the mark.
By LasVegas2009

10/17/09 at 3:14 p.m.

Suggest removal

"Recession is Over" Just all bull$hit! When we have job growth not loss then you can say its over and not until then.
By Bakersfield

10/19/09 at 10:06 p.m.

Suggest removal

I guess if the right government official announces it, the recession is over. Never mind the continued job losses, bank failures, foreclosures and stores closing.
It's amazing how they expect us to believe what they say when the opposite is obvious.