Facebook
Fark
Digg
Reddit
StumbleYet another list we’re last on — pace of economic recovery
Brookings Mountain West’s findings show our region, particularly Las Vegas, is slowest in rebounding from recession
Wednesday, June 16, 2010 | 2 a.m.
Related document
Sun Coverage
Sun archives
- Report: 2011 rebound expected, but full recovery years away (6-15-2010)
- State presents spending plan to stabilize housing market (6-11-2010)
- May foreclosure filings down, but Nevada still ranks No. 1 (6-9-2010)
- Retail recovery around the corner (6-4-2010)
- Las Vegas building boom? There is no building boom (5-28-2010)
- Reich: Be patient about economy (5-28-2010)
- Q&A: Linda Rheinberger, Nevada Association of Realtors (5-28-2010)
- 25 jobs leaving Henderson with Ethel M reorganization (5-21-2010)
- Foreclosures on land pushing prices back to 2003 levels (5-21-2010)
A new report that paints a bleak picture of economic performance in Las Vegas notes that the valley had the sharpest unemployment rate increase among the nation’s 100 largest metropolitan areas from March 2009 through March of this year.
That 3.2 percentage-point increase is but one of many negative statistics tied to Las Vegas in a report that shows just how far behind the city remains in its quest to catch up with other cities on the road to recovery from the Great Recession.
The findings were released Tuesday in a quarterly report by Brookings Mountain West, a partnership of the Brookings Institution think tank in Washington and UNLV. The report focuses on economic trends as of March in the Intermountain West: Nevada, Arizona, Utah, Idaho, Colorado and New Mexico.
One of the report’s major conclusions is that the Intermountain West, which usually creates more jobs following recessions than other regions, cannot make the same claim this time. The region, in fact, saw its economy weaken over the first three months of this year.
“In short, for the first time in three decades the region finds itself unable to lead the nation out of a recession and forced into a period of serious questioning about the sources of future growth with further federal stimulus unlikely,” the report stated.
Intermountain states include 10 of the nation’s 100 largest metropolitan areas. But Las Vegas is the only one that ranked among the nation’s bottom 10 in four key economic categories:
• Third from the bottom with a 53.9 percent drop in housing prices from the first quarter of 2007 through the first quarter of this year.
• Fifth from the bottom with 13.8 percent fewer people employed as of March compared with the second quarter of 2007.
• Sixth from the bottom with an unemployment rate that was 9.5 percentage points higher in March than it was in March 2007, when the unemployment rate was 4.2 percent.
• Ninth from the bottom with a 4.2 percent decrease in gross metropolitan product — a measurement of goods and services produced by the city — from the fourth quarter of 2007 through March.
The only bright spot for Las Vegas was that its inventory of foreclosed homes that failed to sell at auction and are now owned by lenders declined in this year’s first quarter, the only major Intermountain city to make that claim. But the report downplayed that, noting Las Vegas had a large number of foreclosed homes to begin with and that the decline occurred at a slower pace than in the previous three months.
If anything, the picture for Las Vegas could get even grimmer by the time the next Brookings quarterly report is released. One reason is that the city’s unemployment rate hit a record 14.2 percent in April, according to the Nevada Employment, Training and Rehabilitation Department. That translated to 140,900 individuals out of work, a figure that doesn’t include part-time workers or people who have given up hunting for jobs.
In April, the median sales price of existing homes in Las Vegas rose less than 1 percent compared with the same month a year ago, according to the real estate tracking firm SalesTraq. And April’s median price, $126,000, was still lower than the median price of early 2009.
Why is Las Vegas, a city that prided itself on rapid recovery from prior recessions, in much worse shape overall than most other cities when it comes to a rebound?
The percentage-point increase in Las Vegas' unemployment rate from March 2009 to March of this year was 3.2. The Brookings Institution report notes that increase is the largest among the nation's 100 biggest metropolitan areas.
Brookings fellow and Policy Director Mark Muro, co-author of the report, said it has much to do with the city’s dependence on sectors such as tourism and real estate, which rely heavily on consumer spending. Many consumers simply cannot afford to spend the amount of money they once did because they are underwater on their mortgages or drowning in debt, much more so than in prior recessions. Still others are unwilling to spend because they are worried about their jobs.
“When household consumption fell off the table during this latest recession, Las Vegas was inordinately hurt,” Muro said. “The uncertainty about the economy is also causing employers to delay hiring.”
Strangely, Las Vegas experienced a slight uptick in its gross metropolitan product over the past quarter while its unemployment rate also rose, according to Brookings. Muro said that could be explained by technological advances that made workers more efficient. But he added: “You also have workers who are willing to work more given the possibility of being laid off.” And the increase in the gross metropolitan product was a “still feeble” three-tenths of a percent, the report noted.
Nothing in the report surprised economic analyst John Restrepo, principal of Restrepo Consulting Group in Las Vegas.
“It’s not surprising because we have an economy that’s not particularly diversified,” Restrepo said. “The educational level of our workforce is lower than in other cities, which means we have a less employable population. And we have industry that is heavily dependent on consumer spending and consumer confidence.
“Hopefully, we’ve learned a valuable lesson, the importance of having a sustainable economy with investment in social and economic infrastructure. We also learned that hubris is a dangerous quality to have.”
The percentage drop in housing prices from the first quarter of 2007 to the first quarter of 2010 was 53.9.
The Nevada Development Authority, which recruits businesses to the state, actually sees advantages in some of the bad statistics. President and CEO Somer Hollingsworth said his organization uses the high unemployment rate and relatively inexpensive housing prices in Las Vegas as recruiting tools to lure out-of-state businesses here. The logic is that a high unemployment rate means a large and willing labor pool to choose from, coupled with affordable homes for the company’s employees.
In May, Hollingsworth said the authority had visits from 42 out-of-state businesses, far more than the 10 to 15 visits in a typical month.
“What we saw last year was that everyone was panicked to make a move,” he said. “But people are sniffing a recovery out there and the things that made Las Vegas great are still here.”
For Las Vegas to achieve a sustainable recovery, though, Muro said the city will have to diversify its economy, citing clean energy as an example.
“You’ll have to diversify over the next 10 years because we’re certainly not going to go back to the economy we had in 2007,” he said.
Discussion: comments so far…
Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.
Only trusted comments are displayed on this page. Untrusted comments have expired from this story.
No trusted comments have been posted.
Post a comment
Most Popular
- Viewed
- Discussed
- E-mailed
Everything Under the Sun
Blogs
The Kats Report
Clint Holmes is a big deal at Cabaret Jazz and 'The Carlyle!'; Playboy's furry-ous closing; Elvis is a 'Legend'
Joe Pesci remembers his own honeymoon in Vegas -- meeting the Rat Pack (1 Comment)
Las Vegas Philharmonic says search for new music director to begin 'immediately' (1 Comment)
With Shenandoah project stalled, Wayne Newton hits back legally (7 Comments)
Where does a Playmate play when she turns 21? Vegas! (3 Comments)
Ice Ice Billy
The road to six-toed cats and Mayor Bubba
The Kats Report
David Itkin tells L.V. Philharmonic officials he's on his way out (14 Comments)
- Locally owned and independent since 1950; Winner of the Pulitzer Prize for Public Service, best news website in the nation & DuPont Award for broadcast journalism
Trying to buy a foreclosed home or short sale home in Vegas is the equivalent to having a nail shot thru your head. The banks drag out the process until you are so fed up...you just rent. You would think they would want to expedite the process. Getting some bank moron to sign off on an offer is like pulling teeth. They seem to think waiting another, week, month or months to accept an offer means another higher offer is forthcoming. What do they care, it's shareholder money they are playing with...not their own
Great News!!!! 14.2% unemployment and climbing
Now I'm really inspired and get a $39.00 breakfast buffet (worth $3.50), then purchase a $295.00 bottle of booze (worth $11.00), then sit in my private
$700.00 cabana ( worth zero) and dream how to get a $3.10 cent job at in-and-out burger. (but just a dream, there are 414 applicants, including 9 MBA's, 4 ex cpas and Gary Lugman)
Wow ! ... Both your comments are so exactly on, couldn't have said it better myself. Well done !
Thanks Harry!!!!
how's that "hopey / changey" stuff workin' out for ya?
all you people that voted for obama have blood on your hands. those evil rich people that he wants to take money from to give to welfare moms?
ya, see...those evil rich people drive the economy. when the president says "i'm coming for your money" they stop spending. that means less trips to vegas, that means they don't create jobs.
enjoy your health care.
Thanks, stevem, I will enjoy my health care. In case you missed it, even the people of Rwanda, one of the poorest nations on Earth, have subsidized health care for 93% of their citizens for a $2 per month premium. And despite what you're probably thinking, it wasn't the health care system that made the country poor, it's the lack of natural resources. Health care for everyone should be a right, not a privilege.
Cant't wait for your snarky return comment. How's that "hatey / selfish" stuff workin' out for ya?
It looks like we're winning in our race to the bottom of everything!
Vegas spending is discreationary money. No middle class no discreationary money. simple as that. Capitalism is based on this. Teach your children and Grandchildren to speak Chinese not Spanish.
"even the people of Rwanda, one of the poorest nations on Earth"
my point exactly.
and of course you played the "if you aren't a liberal, you hate everyone and if you want to keep more of the money YOU make, you're a hateful racist" card.
Again Stevem misses the point. The economy is recovering (albeit slowly) everywhere except here in Las Vegas. But that's our fault here for having one of the most dependent local economies anywhere in the country. The story's about our local economy. And BTW I'm glad you demonstrate just how empty the Palin rhetoric is when all you can quote is silly, childish retorts to what afflicts our nation.
The nation's conservative agenda is what got us into this mess. You can deny it all you want. Won't change one thing.
well, i can't argue with the ignorant.
the las vegas economy feeds off the NATIONAL economy, doofus.
so, my comments about the NATIONAL economy are valid.
does vegas export anything? does vegas create anything?
no.
and you liberals still can't justify taking money from people that work hard for a living to give to those that don't. so you use "hate, racist, and selfish" to defend your position.
when you vote democrat you spit on the grave of every soldier that died for this nation.
"Trying to buy a foreclosed home or short sale home in Vegas is the equivalent to having a nail shot thru your head. The banks drag out the process until you are so fed up...you just rent. "
-----------------------------------------
Buy new. they are cheap with tons of incentives, no repairs and 10 year warranties. Because new has to compete with foreclosures, alot of my friends who got tired of looking at foreclosures bought new.
Great points stevem. If our economy in East Texas wasn't doing well we wouldn't be coming to LV the end of this month. It is true that it is a waste of time to argue with someone who has a liberal agenda. Unfortunately I feel that the entitlement programs in this country have us on a path to ruin. The run all the way from our citizens through our schools to local governments to D.C. I really feel that until our financial system completely fails there will never be a change. It will come from a basic need for survival. Also, why would we ever want to be compared to Rawanda? That makes absolutely no sense.
acebet: Even if people had a lot of discretionary spending money, I don't know that they'd spend it here. Back when times were good, everything here was seriously overpriced, and you didn't win very often. Who would want to call that a vacation they feel they simply must repeat?
At least we're still on a list! Which means it's not so bad that they don't even to bother with checking out how we're doing here. Ya got to find something positive to keep your sanity. I'm reminded of the line in "Dumb and Dumber"...."so you're saying there's a chance".
I also feel that the present day Vegas experience has become so expensive that there just isn't enough money to go around. I do realize that everyone has their preferences, but my wife and I come out to gamble and we really don't care for the overpriced food and drink. If it is worth the money we don't mind but I feel that the prices became so expensive just because of the "experience". We will eat a couple of nice meals, as we do appreciate great food and wine, but we will not be taken advantage of while there.
How are you going to move a company to Vegas knowing that the school population is majority minority, many, many of whom speak English as a second language? Where the drop-out rate is near 50%?
No, they'll take their business chances in places that produce workers ready to take on added skills and responsibilities. It's called education, people, and we're at the bottom of the barrel.
"The Rich get richer and everybody else gets FU*KED!"
translation = the rich work and create and the poor and lazy sponge and complain.
taking a single dollar from someone that goes to work each day, regardless of how much that person is paid, to give to someone that decided not to get an education and decided to squirt out 3 kids is wrong.
Rwanda? OMG, that's what we should aspire to? How moronic.
Perfect example of requiring at least an average IQ to earn the right to vote.
No one can do more.
I'm sure businesses will continue flocking to Nevada next year when our budget shortfall hits $3 billion. It'll be a great opportunity to get rid of all those wasteful socialist/communist programs like 10th, 11th and 12th grade. We can cut all those unnecessary, expensive, liberal ivory-tower degree programs at UNLV and UNR and just offer a Bachelor of Arts in Valet Parking.
Raising taxes twice in a decade (both during recessionary periods) and talk of raising taxes again are contributing to our slow economic recovery.
First, businesses don't want to come to a place where there is talk of raising taxes again and a history of taxes being raised during economic downturns.
Second, we raised taxes to sustain a government spending bubble that was present during the housing and construction bubble. This meant we reallocated resources from productive sectors of the economy to less productive government sectors.
This is all contributing to slower economic growth and high unemployment rates.
The Vegas economy does NOT feed off the national economy. Anymore.
Expecting it to return reminds me a silver-tipped grizzly bear standing upstream of Grand Coulee Dam in 1941 and wondering when the June Hog Salmon are coming back.
Harry Reid said we were on the right track to recovery. Is this his "right track" being on the last again. Nevada is always at the top of the bad stuff (highest foreclosures, unemployment, drop in personal income, etc.) and on the bottom for the good stuff (bottom in education ranking, bottom in stimulus funds acquired,etc.) and now last on pace of economic recovery. I'm just tired of his lies. Vote him out in Nov.
Emthree, the actual shortfall is closer to $1 billion. $3 billion is subtracting an imaginary budget we've never come anywhere close to having by the amount of money we will likely receive.
The notion of continuing on in the Nevada style of basing our state's future on gambling has reached the point of no return.
We have forty nine states and a black hole. We're it.
How many months in a row has gaming revenue steadily declined, how many years?
And suggesting perhaps a different approach to operating our state has become a taboo topic that'll getcha black-listed for even talking anout finding sources to serve our communities.
Certainly all those paid-for advertisements from NPRI such as the ones immediately previous imply that considering alternatives to status quo (spiraling down and out) would be foolish
its over ....get used to it...
air, the status quo has been to increase government spending continuously. We need to not focus on how much government spends but how effectively it spends money. And sense you didn't notice, Nevada's economy has been diversifying -- actually much faster than the comparative cities to Reno and Las Vegas used by Moody's Analytics during a past Nevada Vision Stakeholder's group. Brookings Institution scholar Dr. Robert Lang even pointed this out and he's not exactly a Free trade, limited government classical liberal himself.
"when you vote democrat you spit on the grave of every soldier that died for this nation"??
Only a hateful fool with no sense of history or Patriotism would make this statement. Remember that the presidents that won WWII were Rooselvelt and Truman, both Democrats. You disrespect the millions of soldiers that supported these presidents as Commander in Chief in that war as well as the thousands who gave their lives for that cause.
Pretty hard to imagine a comment that is lower than that one. You really reveal how hateful and ignorant you are.
I don't need an expert to tell me Vegas is still declining. Go to the following site, go back several years and construct a 12 month moving average for LV visitors, Clark County Gaming Revenue, and do a calculation for what each visitor spends on gaming. Yes, the visitor count is slowly starting to rise, but the gaming revenues and per person spending are still declining and trending lower. This is against a background of more inventory, higher prices across the board, and an increase in population. The immediate future does not look good.
http://www.lvcva.com/press/statistics-fa...
Don't blame Harry Reid -- blame the State legislature and every single Nevada politician who has ever pandered to the conservative masses with a ridiculous "no taxes" pledge.
Restrepo was exactly right -- Nevada is wallowing at the bottom of the economic barrel because of its terrible infrastructure. Creating that infrastructure is going to be painful -- but there are no other options. We can't tax-cut our way to greatness.
world war 2 was a very different america. it was before we let the hippie liberals use "white guilt" to push their agenda.
those brave men and women didn't die so we can have a president shame an entire state for trying to protect its citizens.
"The Vegas economy does NOT feed off the national economy."
really?
REALLY?
how stupid are you?
if it doesn't feed off the national economy, why do we have all those hotel rooms?
so the locals can drive by and look at them?
no, it's so peggy and jim from ohio can have a place to sleep after a night at celine dion and a buffet.
if it doesn't feed off the national economy, then let's close down the airport and see how long the lights stay on without tourists coming to town.
Energey jobs is only a stop gap fix. Once these green energy facilities are built, it only takes a few to maintain them. Las Vegas needs an economy that will be substained for the long haul. I think the Chamber of Commerce should sell Las Vegas as the number one retirement destination. Retirees bring in a steady income that can support businesses in the area. Las Vegas would be great for retirees, great airport,home prices, entertainment, inexpensive and of course great all around weather.
Dopes don't realise that you can't tax yourself into prosperity.
It's Harry Reid's fault. Years on Nevada local politics and 24 years in the Senate but did nothing to diversify Nevada's economy. He protected the Casinos from any competition for low wage labor pools and from any industries that would drive the wages up. He believes Nevada would thrive on casino and brothel industries alone.
It was a very despicable comment and you owe an apology to every Democrat. That is the problem with the right, they seem to believe that they have a monopoly on Patriotism.
How credible and/reliable is this Brookings Mountain West Company? This is just one person's or group's opinion?
Everyday the media reports a new angle... up/down/sideways. Which is it? Depends on who you talk to. Who's fault? Depends on who you talk to as well.
Things are heading in the right directly. Albeit, slower in Nevada, but there are still signs of improvement.
"It's not surprising because we have an economy that's not particularly diversified," Restrepo said. "The educational level of our workforce is lower than in other cities, which means we have a less employable population. And we have industry that is heavily dependent on consumer spending and consumer confidence."
The most important comment in the article right there.
Patrick, I don't think the discussions about raising taxes in the state is scaring off many new businesses/industries. I'm going to go out on a limb and say that every state is currently trying to figure ways to increase revenues or decrease expenses, and I'm comfortable saying that they've all considered both options. Low taxes MIGHT have attracted some businesses in the past, DESPITE THE FACT THAT WE DO NOT HAVE A SKILLED WORKFORCE. But clearly not so much that we have this enormously diverse group of companies and industries in the city/state.
We have very few colleges, all of which are tier 4 schools. We don't place a heavy value on research. Too many members of the community are waiting for the gaming and construction industries to pick back up, so that we can pick up where we left off, and face high unemployment numbers during the next recession.
Insanity: doing the same thing over and over again and expecting different results.
We need to make some significant changes in this community. My personal feeling is that it all starts with education, and we should please a HEAVY emphasis on improving our schools.
"world war 2 was a very different america."
Yup, back then "white right" made colored troops heading off to war ride in segregated rail cars, or get moved to cattle cars to make room for German POWs. Obviously you think America was better back then.
And really, unless you've ever worn the uniform or stood watch at something other than a frat house kegger or boy scout jamboree, you're not fit to invoke the memory of those brave men and woman--whose numbers included conservatives and liberals alike, to further your chicken hawk conservative agenda of blaming "them" for everything that you've failed to achieve in your life. Those men and women died fighting actual tyranny and oppression that deprived people--citizens and immigrants alike, of their basic human rights.
did i blame anyone for anything?
nope.
try again?
There are numerous "excuses" for the region's issues -- on a micro-scale with a plethora of vacant and halted construction of structures the construction segment, the catalyst of growth and expansion has contracted to virtually a non-existent state. For over a decade Clark County enjoyed one, if not the most extensive periods of building phases in the nation which has resulted in the current surplus of structures -- a surplus which has resulted in value/price reductions but more importantly vacancies which must be occupied prior to a rebirth of any building phase of substance along with its associated employment.
On a macro-scale, who wants to own property when it is more economically efficient and competitive not to? Commerce has shifted from the traditional brick-n-mortar to a much more efficient and cost-effective region called cyber-space, which enjoys an enormous cost-competitive edge relative to property ownership.
For example brick-n-mortar obsolesces can be seen in the public sector's education system in which the costs of disseminating information from source to subject can't economically compete with technical advancements which have allowed such dissemination to be done much more efficiently through the Internet/Intranet.
Another example can be seen in the private gaming sector in which potential casino patrons around the world can now click a mouse in the comforts of home instead of dealing with costly air-travel, TSA strip-searches, baggage fees, hotel amity fees, etc. to satisfy their gaming thirst.
In short, technological advancements i.e. the internet has greatly enhanced efficiencies in numerous areas of commerce, essentially obsolescing traditional methods.
I foresee such economic woos continuing (throughout the nation) until the efficiency gaps within the public and private "business" sectors narrows -- which means a major paradigm shift in traditional thinking of how one does business, utilizing cost-efficient websites and technologies hosting an enormous cost-competitive edge or continuing through non-competitive, obsolete brick-n-mortar entities.
: {
People used to come to Las Vegas to get the stuff they couldn't get at home, and it worked!
If you want the people to come back, give them the things they CAN'T get at home.
1. Legalized (heavily regulated and taxed) prostitution.
2. Smoking permitted where the visitor wants to smoke.
3. Legalized gay marriage.
4. Real Customer Service from people dependent on tips.
5.Etc., etc., etc.
I have a friend who works in Omaha for one of the subsidiaries of BH,and Mr Buffet stopped by one day to discusss some random business with some of his clan
He said that the southwest states wont gain back there lost equity for another 7-10 years
That is a very sobering reality for most of here still
peace out
Why thank Harry Reid.
He is not the one that told you to suck all the equity out of your home and buy things you could not afford.
He is no the one to tell you to sell your house for $100,000 more then you paid for it and buy a house for $300,000 more. He never forced you to sign the mortgage payments on a house you could never afford in the first place.
If the American public had used common sense and a bit of third grade budgeting we would not be in this problem at all.
I know, Americans are never at fault. They have to blame someone for their problems.