Nevada Labor Market Briefing: May 2018 Summary of Labor Market - PowerPoint PPT Presentation

Nevada Labor Market Briefing: May 2018 Summary of Labor Market Economic Indicators Department of Employment, Training, & Rehabilitation Don Soderberg, Director Dennis Perea, Deputy Director David Schmidt, Chief Economist Prepared by the Research and Analysis Bureau

Nevada’s Labor Market Running Strong

May Employment: Slight Decline Over the Month Total Nonfarm Employment Total Employment 1,400,000 of 1,374,200 in 1,350,000 May 1 1,300,000 1,250,000 Down 700 jobs employment over the month, 1,200,000 2-month gain still positive at 2,500 1,150,000 1,100,000 76,900 jobs 1,050,000 above previous 1,000,000 peak '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 1 seasonally adjusted

Annual Job Growth Dips Below Three Percent Nevada Job Growth vs. Year Ago The State added 55,000 4.5% 37,400 jobs over 50,000 4.0% the year in May, a 45,000 3.5% gain of 2.8% 1 40,000 annual job growth (SA) annual percent change 3.0% 35,000 2.5% 30,000 25,000 2.0% 20,000 1.5% 15,000 1.0% 10,000 0.5% 5,000 0 0.0% J J A S O N D J F M A M J J A S O N D J F M A M '16 '17 '18 jobs pct. change 1 seasonally adjusted

Nevada’s Growth Continues to Outpace Nation Job Growth: NV vs. U.S. Nevada’s 6% employment grew 4% at an annual rate 2% employment; annual percent change of 2.8% in May, compared to 0% 1.6% in the nation -2% as a whole 1 -4% -6% Nevada’s job -8% growth has -10% outpaced the -12% nation for 70 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 straight months Nevada U.S. 1 seasonally adjusted

Nevada Maintains Highest Private Sector Job Growth in the U.S. Through 2017 Nevada led the U.S. Private Sector Growth Rankings nation in private- 50 50 sector job growth 49 50 48 states with private sector employment growth less than Nevada 47 46 in 2017 40 38 Employment up 38,600 from 30 2016, a growth 24 rate of 3.4 percent 20 14 14 10 2 0 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Nevada’s Small Businesses Continue Adding Jobs As of 2017:IVQ, Employment in Firms with Less Than 100 Employees employment in 650,000 Nevada’s small 630,000 businesses 610,000 totaled 632,000 590,000 28 consecutive 570,000 quarters of jobs 550,000 annualized 530,000 growth 510,000 Nearly 46,000 490,000 more jobs than 470,000 previous peak in 450,000 2007 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

Year-to-Date Job Growth Across Nearly All Sectors Manufacturing Nevada Nonfarm Job Growth by Industry added 6,500 jobs Manufacturing through May, a gain Construction of 14.3% 1 Education & Health Services Construction added Trade, Transportation, & Utilities 6,300 jobs or 7.8% Government Professional & Business Services Ed/health services, Leisure & Hospitality trade/trans./utilities, Other Services and government Financial Activities each added 6,000 Mining & Logging jobs Information -1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Information sector YTD job growth is down by 300 1 not seasonally adjusted

May 2018 Unemployment Rate: 4.8% 0.1 point decline Unemployment Rate: Nevada vs. U.S. is first in ten 16% months 1 14% Down from 5.1% 12% a year ago unemployment rate (SA) 10% Peaked at 13.7% 8% during the 6% recession 4% Gap between 2% Nevada and the nation steady at 0% '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 one percentage Nevada U.S. point in May 1 seasonally adjusted

Jobless Rate for Teens and Young Adults Now Below Pre-recession Level Unemployment Rates by Age Group in Nevada Among unemployed 25% teens and young adults 16-24 years unemployment rate; 12-month moving average old: 20% • 26.6% have less than a High School 15% diploma • 48.4% have a High School diploma 10% • 22.4% have some college or associate degree, 5% • 2.6% have a Bachelor’s degree or 0% higher '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 16-24 25-34 35-44 45-54 55+ total rate

Alternative Measures of Labor Underutilization Most measures of unemployment are at or near 2003 levels. U-1 : Unemployed 15 weeks or more U-2 : Job Losers U-3 : Similar to official rate U-4 : U-3 plus discouraged workers. U-5 : U-4 plus other marginally attached to labor force.

Involuntary Part-Time Employment Levels of involuntary part- time employment remain high, but have been falling since late 2010. People who are employed part- time, but would prefer full-time employment if it were available.

Full Time Employment in Nevada Reaches a New All Time High Full Time and Part Time Employment in Nevada 1,112,190 1,200,000 Nevadans are employed full 1,000,000 employed; 12-month-moving average time (working 35 hours or more per 800,000 week), a record high 600,000 299,210 400,000 Nevadans are employed part 200,000 time 0 95 00 05 10 15 18 full time part time

Average Weekly Wages Reach New High As of 2017:IVQ, Average Weekly Wages in Nevada $1,000 12.0% average weekly wages reached a 10.0% $950 record-high of 8.0% $900 $955 6.0% $850 An increase of 4.0% $800 $31 or 3.3% over 2.0% the year $750 0.0% $700 Wages have -2.0% increased 6.2% $650 -4.0% since 2014, while $600 -6.0% consumer prices '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 percentage change average weekly wage grew by just 4.3% over the same period

National Data on Full-Time / Part-Time Wages Source: Federal Reserve Bank of Atlanta, Macroblog This larger gap (between full-time wage changes and part-time wage changes) appears to be attributable to a rise in the share of part-time employment in low-skilled jobs since the recession. In particular, relative to 2007, the share of part-time workers in the Wage Growth Tracker data in low-skilled jobs has increased by about 3 percentage points, whereas the share of full-time workers in low- skilled jobs has remained essentially unchanged. http://macroblog.typepad.com/macroblog/2018/06/part-time-workers-are-less-likely-to-get-a-pay-raise.html

National Data on Drivers of Wage Growth Source: Federal Reserve Bank of Atlanta, Macroblog Although wages haven't been rising faster for the median individual, they have been for those who switch jobs. This distinction is important because the wage growth of job-switchers tends to be a better cyclical indicator than overall wage growth. In particular, the median wage growth of people who change industry or occupation tends to rise more rapidly as the labor market tightens. Changing industry when unemployment is high tends to result in a wage growth penalty relative to those who remain employed in the same industry. But when the unemployment rate is low, voluntary quits rise and workers who change industries tend to experience higher wage growth than those who stay. The wage growth performance for those changing jobs suggests… the labor market is continuing to gradually tighten. http://macroblog.typepad.com/macroblog/2018/04/hitting-a-cyclical-high-the-wage-growth-premium-from-changing-jobs.html

Initial Claims for Unemployment Insurance Initial Claims for Unemployment Insurance 9,800 initial 40,000 claims in May, 35,000 down two percent over the month 30,000 25,000 Decline of three percent from the 20,000 previous year 15,000 Maximum weekly 10,000 benefit amount 5,000 for FY 2019 set at $450 0 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 claims 12-month moving average

Employment Changes Since Recession by Area Las Vegas is the only area to have passed its prerecession employment peak. The Reno and Carson City MSAs are growing at a faster pace than Las Vegas, and are both within 1% of prerecession levels.

Nevada’s Economy: GDP Growth Nevada’s gross Nevada's Gross Domestic Product $145,000 6% domestic product gross domestic product; millions of 2009 $; seasonally adjusted (GDP) totaled over $140,000 4% $131 billion (in $135,000 2% 2009 $s) in year-over-year growth 2017:IVQ $130,000 0% annual rates $125,000 -2% Nevada’s GDP growth, at 4.2% in $120,000 -4% 2017:IVQ, has $115,000 -6% exceeded the nation’s for six $110,000 -8% consecutive $105,000 -10% quarters '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 y/y growth gross domestic product

Nevada Private Sector Business Establishment Openings Business Establishment Openings Nevada added 150 4,200 new business establishments 140 during 2017:IIIQ 130 Openings have 120 2011:IQ = 100 exceeded 4,000 in each of the past six 110 quarters 100 Openings are 90 exceeding the pace 80 of the US as a IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ IVQ IQ IIQ IIIQ whole. '11 '12 '13 '14 '15 '16 '17 Nevada U.S.

Nevada’s Retail Employment Nevada’s retail Retail Trade Growth: Nevada vs. U.S. trade employment 250 more than doubled from retail trade employment index (Jan 1990 = 100) 200 1990 to 2018 Strongest gain in 150 the nation 100 Clothing and accessories 50 stores saw the largest gain, followed by 0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 general Nevada U.S. merchandise stores