Business Indicators - April 2003

Business Indicators

by R. Keith Schwer

Key economic indicators continue to reveal modest economic performance, both nationally and in Nevada. Most believe we had a recession in 2001, reached bottom, and began recovering during 2002. Recent mild expansion does, nonetheless, leave some questioning the economy’s future direction. Indeed, economic performance has been so soft that total employment has yet to return to its high mark of March 2001. In addition, if the economy is in a recovery, the rate of growth is decidedly meager by historical standards. A few people forecast a double-dip recession, believing that recovery has been insufficient to sustain a usual period of expansion.

Having failed to recover to the March 2001 benchmark, the national employment picture leaves open to question whether the recession that started in March 2001 is even over. Other key data series, however, have passed previous peak levels. For example, expenditures, income and sales series have recovered sufficiently to surpass the March 2001 high mark.

Some key sectors for sustaining national growth have experienced difficulty. For example, high-tech sales and employment continue to show weakness. Business investment in computers and communication has been slow to recover. Accounting and financial scandals, global uncertainty reflecting possible terrorism, war and disruptions of supplies further depress investment spending. In short, slow growth prevails and the near-term national outlook is for more of the same.

Compared with year-ago activity, Nevada’s unemployment rate declined and the other six data series posted positive growth rates. Other than commercial permits, the same positive assessment holds for the nine data series for Clark County (Las Vegas). Also, Washoe County (Reno) shows a decline in only one series and a 3.5 percent unemployment rate is unquestionably very good. All in all, Nevada’s status is good, but growth is weak.