Posted on: August 19, 2024, 06:55h.
Last updated on: August 18, 2024, 09:58h.
The unemployment rate in Nevada ticked upwards to 5.4% in July. It marked the second unemployment rate hike in a row.
Nevada’s Department of Employment, Training, and Rehabilitation (DETR) reports that the state’s unemployment rate climbed from 5.2% in June to 5.4% in July. Nevada’s casino industry, the state’s economic engine, was blamed for the month-to-month net loss of about 1,500 jobs.
“Nevada’s labor market softened in July, as unemployment increased again and employment declined slightly over the month,” said David Schmidt, the chief economist at DETR.
This decline was concentrated in the leisure and hospitality sector, which fell by 5,000 jobs from June to July, while most other industries grew, leading to an overall decline of 1,500 jobs over the month. It is possible that this estimate was affected by the closure of the Mirage, which closed on July 17, impacting the casino-hotel, food services, and casino support industries.”
The seasonally adjusted 5.4% unemployment figure marks Nevada’s highest rate in more than two years.
More People, More Workers
The Las Vegas Valley has seen a considerable population increase in recent years, as an exodus from California has transplanted many to Southern Nevada.
In just three years, the Las Vegas metro has increased from about 2.77 million residents in 2021 to more than 2.95 million people this year, a 6.5% surge or about 181K people. With the workforce expanding, Las Vegas must add additional jobs to offset the influx of more people.
DETR reports that the economy has fended off the population surge adequately, as the state added about 49,900 jobs to the labor force over the last 12 months. Total employment, as of July 2024, was 1,584,600 jobs, DETR said.
The Tropicana and The Mirage respectively closed in April and July. The resort closures took more than 4,500 guestrooms offline and canceled thousands of jobs.
The silver lining is that the resort closures are expected to benefit other Strip properties, which should lead to higher room rates for the remaining operators. The Mirage generated almost $600 million in room revenue last year for MGM Resorts.
The Mirage will remain shuttered until at least the spring of 2027 when it reopens as Hard Rock Hotel & Casino Las Vegas. Hard Rock has hired thousands of construction workers to transform the Polynesian-themed destination into a rock ‘n’ roll complex. The forthcoming resort will need thousands of permanent staff to operate the integrated resort.
The Tropicana is being demolished to possibly make way for an MLB stadium, which would create thousands of construction jobs and many permanent operational positions.
Unemployment Above National Average
Nevada’s casino industry is running at record levels, as gaming revenue reached all-time highs in each of the last three years. Pent-up demand for entertainment and leisure travel stemming from the COVID-109 pandemic was originally cited for the gaming surge, but the rally has continued far beyond expectations.
Nevada today employs more people than before the pandemic — 1,584,600 jobs as of last month compared to 1,420,800 jobs in July 2019. But because of the population increase, Nevada’s unemployment is higher than the 3.7% rate reported in July 2019.
The U.S. unemployment rate as of July was 4.3%, up from 4.1% in June. July marked the nation’s fourth consecutive unemployment rate increase from 3.8% in March.
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