Welcome to the fifth installment of “Road to recovery, A recurring feature that provides semi-regular updates on Nevada news and economic data.
The state’s economy has been hit hard by the COVID-19 pandemic. Restrictions on public activity have resulted in business closures and thousands of jobs lost, and many sectors of the economy have yet to regain their pre-pandemic condition. As Nevada recovers from the pandemic, this series will take a closer look at the state’s most important economic indicators.
You can find the latest data on our Nevada Recovery Dashboard data page and on Twitter. (To follow Tabitha mueller for updates on housing data and Howard stutz for updates on game and touring numbers). Also, do not hesitate to contact [emailÂ protected] with all questions.
Below, we take a closer look at the significance of a recent Federal Funds-to-State Briefing Report that ranked Nevada # 1 in the country for “economic dynamics” and labor market volatility. the state.
The rapid turnover rate of the workforce was driven, in part, by American workers leaving their jobs at an all-time high, prompting many to call the movement the âGreat Resignationâ. But Nevada economic experts have pointed to the inaccuracies of that label, noting that many workers have made the transition to new jobs or have completely re-evaluated their participation in the labor market.
First in “economic dynamics”
A report released late last month by the Federal Funds Information for States ranks Nevada number one in the country in terms of “economic dynamics,” a measure based on year-over-year growth in personal income. employment and population. Federal Funds Information for States is a service created by the National Governors Association and the National Conference of State Legislatures that provides reports on financial policy.
These metrics help highlight how Nevada has rebounded at a rapid pace after a two-month recession at the start of the COVID-19 pandemic that saw unemployment soar to its highest level in state history. , but experts warn that these few statistics do not. capture the full image.
âIf they had added the unemployment rate, and we’re second-to-last, that would have lowered our ranking considerably, I think,â said Stephen Miller, research director at the Center for Business and Economic Research (CBER). UNLV.
For several months last year, Nevada had the highest unemployment rate in the country, but as businesses found their place, improved unemployment benefits expired and hiring accelerated, that rate gradually increased from 8.5% in January 2021 to 6.8% in November.
That number for November, the latest month for which data is available, marked the first time Nevada’s unemployment rate has fallen below 7% since the start of the pandemic. But despite the gradual improvement, Nevada still had the second-worst unemployment rate in the country in November.
Still, the Dynamics Index is indicative of the positive movement of Nevada’s economy in 2021.
âI wouldn’t say ‘Hey, everything’s fine’ without looking at ‘Hey, we had a big hole to dig.’ But I don’t think you should be neglecting growth either, “said David Schmidt, chief economist at the Department of Employment, Training and Rehabilitation.” We had a big hole. good job bouncing back, and I think that’s really what is reflected in this ranking.
Composed of three main components, the “economic dynamics” index for December shows Nevada ranked 17th in the country for personal income growth from the third quarter of 2020 to the third quarter of 2021, second for growth. of employment from November 2020 to November 2021 and ninth of population growth from July 2020 to July 2021. (The timing of these year-to-year changes will vary due to the availability of data for each metric. )
The combination of these factors allowed Nevada to hold a significant first place advantage in the Dynamics Index. The difference between Nevada and the second largest state, Nebraska, was greater than the difference between Nebraska and the 10th state, Idaho.
But the recovery, and the state’s economic dynamics, are not evenly distributed. Nevada has consistently lost around 50,000 jobs since a peak in February 2020. These losses are largely concentrated in the accommodation industry – a sector that includes casinos and hotels – which is still losing more than 67,000 jobs. , even with significant gains since May 2020.
Employment figures for other industries surpass figures recorded just before the pandemic. In November, the retail industry increased by 13,700 jobs since February 2020, and the transportation and warehousing industry increased by 13,900 jobs.
While some sectors of the economy continue to suffer, many parts of the state have made a significant recovery. In November, the Reno-Sparks region recorded an unemployment rate of 2.9%, almost identical to the 2.8% rate seen two years earlier. In that same month, the only counties to register an unemployment rate higher than the national rate of 4.2 percent were Clark County (6.3 percent) and Nye County (4.6 percent). hundred).
Increased turnover of the workforce
As employment in the casino and hospitality industry remains significantly lower than pre-pandemic totals, Schmidt and Miller both said that many of those jobs in the accommodation industry were likely gone for good.
With thousands of workers moving into new industries, Nevada’s labor market has seen some of the highest hiring and termination rates in the country in recent months.
âWe have a lot of people in the same industry who have been dislocated,â Schmidt said. âThey’re not doing the job they used to do.
From July to October, Nevada ranked in the top three states in terms of hiring rate, and during that time Nevada also ranked between second and seventh in the country for its termination rate. employment.
An increasing number of these terminations are due to people voluntarily leaving their jobs, classified as the quit rate. In July, even as Nevada had the second highest severance rate in the country, the state’s severance rate ranked 18th, with terminations accounting for about 58% of terminations of employment.
The rate of workers leaving their jobs has continued to rise – in October, the last month for which state-level job turnover data was available, Nevada ranked seventh for its job separation rate. job and third for the quit rate. Resignations made up more than 70 percent of the separations.
Since the start of the pandemic, more and more Nevadans have left the workforce. Some have taken early retirement. Others had to take care of their families despite the difficulties in finding childcare services. Schmidt added that some people might be motivated to quit work for higher wages – data from the Federal Reserve Bank of Atlanta shows wage growth has been higher for people who change jobs than for those who change jobs. people who have been staying since December 2018.
Nationwide data also indicates that dropouts likely remained high in Nevada in November. The Bureau of Labor Statistics reported earlier this month that 4.5 million Americans quit their jobs in November, up from 4.2 million in October and the highest number in the two decades that the federal government tracked the data. State-level data on workforce turnover in November will be available later this month through the office.
While the high and prolonged quit rate has been called a âbig resignation,â Schmidt and Miller said this does not fully describe the changes taking place in the job market. Masses of workers are voluntarily leaving their old jobs for higher pay or different work. Even though departures continue at a historically high rate, hires outnumber departures and the unemployment rate continues to decline. These changes have been described as a “big overhaul” or a “big re-evaluation,” as Miller put it.
âMy colleagues and I here at CBER like to call it the ‘big reassessment’ meaning employers and employees took the time during the pandemic … [to] rethinking their participation in the workforce, âMiller said.
Amid the dynamic changes in the job market, Miller noted that the rapid pace of turnover is not entirely new.
âThe job market is always on the move, so it always has some volatility, probably a lot more than most people realize,â he said.
He added that the pandemic has increased volatility, in part because of declining labor market participation, which is the denominator of the equation. With fewer people in the workforce, the rate of hires and terminations will increase even if the number of people hired and leaving work remains the same.
As Nevada enters another year of economic recovery in 2022, Schmidt said he expects hiring to continue at a rapid pace.
âI think that probably at the start of the year, we will continue to see the same rate that we have seen with job growth, increasing at a rapid rate compared to what we have seen historically,â he said. -he declares.
Schmidt also said labor market volatility could have a positive effect on the future of the state’s economy, especially as former hospitality workers move into new industries.
“I think this dynamic activity, even if it comes with costs and short-term challenges, also helps you to prepare very well for the future, because you are able to continue to adapt to attract new industries”, did he declare. âAs a result, we will see more diversification. We will see more and more people heading into new industries.