Reno-Sparks Economic Metrics Still Quite Good

This month’s Northern Nevada numbers show minor upticks or dips in a healthy regional economy.
The latest stats show that 7.3 percent of the Reno-Spark’s MSA’s payroll job base is in the construction industry; the August 2006 peak (on a 12MMA basis) was 11.1 percent of all jobs.
Also of note:  Washoe County’s economy continues to benefit from rising taxable retail sales, but the year-over-year (YOY) growth rate has dropped from a year ago. In March 2018, growth was 5.7 percent YOY, 3 points lower than the year period ending in March 2017. The raw numbers are strong, though. Taxable retail sales in the region reached $698.8 million in March, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). Washoe’s taxable sales growth is 1.4 points higher than the overall Nevada average.
 
stat highlights

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emp index
In May 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks ticked up to 99.4. While the Index has been increasing at a slower rate, it continues making progress closer to the all-time high. The Index is up 0.7 points since May 2017. It peaked more than 12 years ago in December 2005 at 99.8 aka 100.0. The trough of 89.6 occurred in January 2010.
job growth
In May Reno-Sparks job growth, on a 12MMA, dropped 0.2 points from 5.0% to 4.8%. The rate of growth is up 0.2 points up from the 4.6% recorded in May 2017. The lowest rate of growth in the last 10 years happened in December 2009 (-9.3%).The region’s previous record 12MMA high was in August 2016 when jobs grew by 4.9%.
The 12MMA headline unemployment rate held at 4.0% in May. When compared to the May 2017 headline rate of 4.7%, this May’s rate was 0.7 percentage-points lower. In comparison, strong job numbers for the Las Vegas MSA resulted in a 0.1 point decline in the unemployment rate there after 4 consecutive months at 5.2%. Reno has reached rates seen before the Great Recession.
yoy construction
There were 86,083 construction jobs in Nevada in May 2018. 16,925 (19.7%) of those jobs were in the Reno-Sparks MSA (12MMA). While this is a notable jump of 8.4% from the 15,608 jobs reported in May 2017, over February and March of this year, construction jobs were unchanged, and compared to April, construction jobs actually fell slightly by 17. Reno’s very healthy economy has produced strong residential and commercial real estate demand, but also to shortages of housing units and certain types of commercial space, especially industrial.
The latest stats show that 7.3% of the region’s payroll job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. Current construction jobs are at 70.4% of the peak. At the time of the peak the industry accounted for 11.1% of all jobs. The large number of jobs in the construction sector was a consequence of the pre Great Recession real estate bubble. The sector bottomed out in February 2012 when there were only 8,792 construction jobs.
visitor volume
The annualized visitor count for Washoe County fell -0.27% from March 2018’s 5.15 million to 5.14 million in April 2018. However, with a YOY visitation growth rate of 3.9%, Washoe County continues to outpace growth in Clark County, which had a visitation growth rate in April of -1.9%. We believe visitation to Clark County is being negatively affected by a shortage of rooms.
Early in 2016, Washoe had been lagging behind Clark in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe beating those of Clark every month since June 2016 because of the supply constrained note above.
Washoe County has now seen YOY growth in visitor volume every month for more than 3 straight years (since January 2015) at an average rate of 3%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate happened in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains and continues to grow stronger.
gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 4.6% in April 2018. This brings total revenue up to $70.1 million, or 78% of the peak (see below). In comparison, Clark County had a YOY growth rate of 2.6% this April. Both counties saw an increase in the gross gaming revenue growth rate. The YOY growth rate for Washoe County has been positive for more than 3 years straight at an average of 3%.
Gaming revenues peaked more than 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, the peak of 5.5% happened in May and June of 2006.
taxable retail
While Washoe County’s economy continues to benefit from rising taxable retail sales, the YOY growth rate has dropped from a year ago. In March 2018, growth was 5.7% YOY, or 3 points lower than the year period ending in March 2017. When compared to February 2018, it is down 0.2 points. Taxable retail sales reached $698.8 million in March, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth is 1.4 points higher than the overall Nevada average.
Success in business attraction and retention, and proximity to the Bay Area and the Pacific Northwest, is driving the region’s economy. It is the primary cause of growth in taxable retail sales, though increasing visitation has also contributed.
better known
This month we continue the introduction of a new chart for Stat Pack. It displays Washoe County taxable sales generated in a selected sample of what we are calling the “better known” (“BK”) activities. We hope this will give readers an insight into the level of economic activity in familiar industries. Some of these sectors are not necessarily large generators of sales taxes, but we think readers will find them interesting.
In March 2018, Retail made up 62.5% of taxable sales of the BK industries and 60.1% of total sales in all sectors. Compared to March 2017, Retail is down 1.9 points as a share of BK sectors. Accommodation & Food/Beverage was the second largest (15.3% of BK sectors and 14.7% of total sales). Accommodation & Food/Beverage is down 0.6 points from March 2017’s 15.9% of the BK industries. Manufacturing came in at a distant 3rd place with 5.5% of the BK set, beating out last month’s 3rd place finisher, Telecom & Media.
home resales
In April 2018 MLS home resales in Washoe County fell by 2 percentage points from the previous month to 571 on a 12MMA. When compared to April 2017, resales rose by 6.6%. The resale YOY growth rate rose 0.5 points in April compared to March and has picking up steam since December 2017. For over 3 straight years, home sales have been increasing on a YOY basis, with an average rate of growth of 4.2%.
The median sales price rose to $354,540 (12MMA) in April, a 13.3% jump from April 2017. By comparison, the Las Vegas median resale price in April also jumped by 13.3%; However, the Las Vegas price is much lower at $237,117. The looming housing affordability issue in both regions also applies to the new home market.
housing opp
In Q1, 2018 the Housing Opportunity Index (“HOI”) for the Reno-Sparks MSA dropped 0.6 points from 43.3 in Q4 to 42.7 in Q1 on a four-quarter moving average (“4QMA”) basis. The U.S. index increased by 0.3, from 59.4 to 59.7, during the same period. The Reno-Sparks 4QMA HOI is 17 points lower than the national number. On a YOY basis, the Reno-Sparks index fell -7.4 points from 50.1 in Q1, 2017.
Reno-Sparks’ HOI peaked at 85.8 in Q1, 2012 and has been trending downward ever since. It bottomed out at 17.3 in Q4, 2006 at the peak of the housing boom. The 10-year average is 65.1. The region’s latest index is now 22.4 points below the 10-year average. There could be issues regarding housing affordability in Reno-Sparks in the future if the index continues to deteriorate. If this this trend continues, housing affordability is likely to become a major issue in the region, stymieing economic growth.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in the Reno-Sparks MSA, assuming standard mortgage underwriting criteria.
commercial market
According to Colliers International, Reno-Sparks Office vacancy continues on a downward trajectory in Q1, 2018. Office vacancy fell 0.2 points from the previous quarter to 12.1% on a 4QMA basis, its lowest value in more than 13 years, since Q4, 2004. The Reno-Sparks Spec Office market has seen slow and steady improvement since Q3 2010 when the Spec Office market had reached peak vacancy of 21.6%.
The Industrial vacancy rate also fell in Q1, dropping 0.8 percentage-points and reaching 6.3%. After 5 consecutive quarters of increasing vacancy, the Industrial markets vacancy rate has now fallen 7 straight quarters. Vacancy is now comfortably below the 10% stabilized rate. Although a large amount of new product has recently come to market, the Reno-Sparks MSA has had a healthy appetite for Industrial space.
weekly earnings
The 12MMA of the nominal average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA grew $5 in May 2018 to $809, the biggest monthly gain since January 2016. May was the 11th consecutive month of growth. When considered on a YOY basis the unadjusted weekly wage is up 2.2% from $791 in May 2017.
The inflation-adjusted (real) 12MMA wage for May 2018 of $686 is up $3 from the previous month’s wage, but despite the gain, May’s wage is just even with the wage recorded in May 2017. Reno-Sparks workers did not see any wage growth over the year, a long-running problem for workers across the US. This has received attention since the recovery started. It is partially a function of the growth of the “gig economy” plus ongoing automation trends. Reno-Sparks’ real wage has fluctuated between $682 and $686 for more than a year and has been unable to maintain an upward trend. In May, the region’s average weekly earnings were 2.5% higher than the Las Vegas average of $669. The real wage peak of the last 10 years occurred in May 2016 when it was $730.
weekly hours
In May 2018, the Reno-Sparks MSA’s average weekly hours gained back the 0.1 hours that it had lost in April, resulting in average weekly hours of 35.4. Weekly hours had been trending down and this was the first month that they increased since June 2017. Conversely, weekly hours in Las Vegas have been trending slowly upward, but in May saw a 0.1 hour decrease. On a YOY basis, weekly hours for Reno-Sparks are down -0.3 from May 2017. The most recent weekly hour’s peak happened in July 2009 at 36.8 hours, while the trough of 32.5 hours happened over 3 years ago in September 2014.
unleaded fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of June 8, 2018 was $3.47, up $0.09 (2.5%) from $3.38 the previous month. When compared to the previous year the price of regular unleaded is up $0.44 (14.5%). Gas prices have been rising steadily and could impact resident and business spending in other areas of the local economy, although it appears that they topped off at the end of May and are now stabilizing.
According to AAA, “Nationally consumers are spending $69 more a month to fill-up compared to last summer. Gasoline expenses are accounting, on average, for seven percent of an American’s 2018 annual income, a one and half percent increase since summer of 2017. With strong summer consumer gasoline demand expected in the months ahead, AAA says motorists can expect little relief at the pump with the national gas price average ranging between $2.85 – $3.05 through Labor Day. 
Pump prices in the West Coast region are among the highest in the country, all topping out above $3.00 per gallon: California ($3.72); Hawaii ($3.71); Washington ($3.46); Alaska ($3.43); Oregon (3.34); Nevada ($3.33); and Arizona ($3.07). On the week, prices continue to mostly decline in the region by a penny or two. However, Arizona (+1 cent) and Alaska (+2 cents) saw increases, while Oregon (-2 cents) saw the largest decrease in the region. 
According to EIA data for the week ending on June 1, inventories of gasoline fell by 200,000 bbl to reach 31.1 million bbl. When compared to a year ago, levels are still up more than 3 million bbl and could contribute to price stabilization in coming weeks.”
gold
Per the World Gold Council, in May, the month-end spot price of gold (ounce of pure gold) increased by a little under $3 (0.22%) to just under $1,296 on a 12MMA basis. On a monthly basis, gold prices have increased for 7 months straight. On a YOY basis, the price of gold is up 2.7%. Though the YOY growth rate been trending up for 5 months straight, in May it saw a slight 0.2-point decline from 2.9% the month before. Still, prices have been increasing on a YOY basis for the past 22 months.
pot
Nevada excise tax revenues generated from marijuana sales through the first 9 months are nearly $49 million, with the most recent recorded month, March 2018, seeing a considerable spike in revenue of more than $1.1 million from the previous month. March brought in about $7.1 million in combined retail and wholesale taxes, compared to $5.9 million in February. The most readily available report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at point of sales at the dispensaries or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged to only recreational users purchasing marijuana at a dispensary.
According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million during the next 2 years. Collections during that last 9 months indicate that the Department’s forecast is right on track. Another boost for Nevada’s marijuana industry may come if President Trump follows through with his recent suggestion that he is open to legalizing the drug at the federal level.

Reno-Sparks Economic Metrics Continue to Hold

The March 2018 numbers for Northern Nevada are mostly trending green. Notably, of the 85,233 construction jobs in Nevada, 16,942 (20 percent) of those jobs were in the Reno-Sparks MSA (12-month moving average/MMA). This is a jump of 12.1 percent from the 15,117 jobs reported in March 2017, driven by strong residential and commercial real estate demand, as well as shortages of housing units and industrial space.
Enjoy this month’s stats, and don’t hesitate to distribute them to interested parties.
r stat highlights

r positive

r emp index
In March 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks increased by 0.1 to 99.3. At just 0.5 points below the record high, the pace at which the Index had been rising has slowed considerably. The Index is up 0.8 points since March 2017. It peaked more than 12 years ago in December 2005 at 99.8 aka 100.0. The trough of 89.6 occurred in January 2010.
r job growth
In March Reno-Sparks job growth, on a 12MMA, fell back 0.1 percentage-points from the previous month’s record high of 5.1%. The rate of growth is 0.5 points up from the 4.5% recorded in March 2017. The lowest rate of growth in the last 10 years happened in December 2009 (-9.3%).The region’s previous record 12MMA high was in August 2016 when jobs grew by 4.9%. It subsequently dropped until May 2017, when it began its ascent to the current rate.
The 12MMA headline unemployment has remained at 4.1% since January 2018. It had been falling every month by 0.1, sometimes 0.2 points, since September 2011, but the decline began to stall in May 2017. When compared to the March 2017 headline rate of 4.8%, this March’s rate was 0.7 percentage-points lower. In comparison, the rate in Las Vegas has not changed for the last 3 months, holding at 5.2% since January 2017. Reno’s latest rate has reached rates seen before the Great Recession.
r u3 & u6
The U-3 unemployment rate for Nevada, after falling in Q4 by 0.2 points, increased by 0.1 points in Q1 2018 to 5.1%. The U-3 rate is now 0.5 points above the average rate for 2007, the year the Great Recession hit. The U-6 rate fell 0.4 points from 10.8% in Q4 to 10.4% in Q1, a healthy decline that follows up last quarter’s 0.6 point drop. Nevada’s U-6 rate is still the 3rd highest in the nation, beating only New Mexico and Alaska. As shown in the chart, the spread between the two rates is generally tightening, albeit gradually, indicating that wage increases will continue to solidify.
In terms of the U-3 rate, Nevada worsened several spots in Q1 2018 and now has the 5th highest headline rate in the nation, beating 3 states and the District of Columbia. In Q4 it was beating 6 states and DC.
r yoy construction
There were 85,233 construction jobs in Nevada in March 2018. 16,942 (20%) of those jobs were in the Reno-Sparks MSA (12MMA). While this is a notable jump of 12.1% from the 15,117 jobs reported in March 2017, compared to February 2018 construction jobs did not grow at all. Reno’s very healthy economy has produced strong residential and commercial real estate demand, and continues to contribute to an improving construction sector, but also to shortages of housing units and certain types of commercial space, especially industrial.
The latest stats show that 6.8% of the region’s payroll job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. Current construction jobs are at 70.4% of the peak. At the time of the peak the industry accounted for 11.1% of all jobs. The exceptional size of the construction job sector was a consequence of the pre Great Recession real estate bubble. The sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
r visitor volume
The annualized visitor count for Washoe County fell -0.11% from February 2018’s 5.16 million to 5.15 million in March 2018. However, YOY growth in visitation to Washoe County continues to outpace growth in Clark County, although both counties saw a drop in the YOY visitor growth rate in March. We believe the continued decline in visitors to Clark County is the result of a room shortage.
In March 2018, YOY growth for Washoe County was 4.6%. By comparison, the YOY growth rate in Clark County for the month of March 2018 was -1.9%. Early in 2016, Washoe had been lagging behind Clark in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe beating those of Clark every month since June 2016 because of the supply constrained note above.
Washoe County has now seen YOY growth in visitor volume every month for more than 3 straight years (since January 2015) at an average rate of 3%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate happened in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains and continues to grow stronger.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 4.2% in March 2018. This brings total revenue up to $70 million, or 78% of the peak (see below). In comparison, Clark County had a YOY growth rate of 2.2% this March. The YOY growth rate for Washoe County has been positive for more than 3 years straight at an average of 3%.
Gaming revenues peaked more than 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, the peak of 5.5% happened in June 2006.
r taxable retail
While Washoe County’s economy continues to benefit from rising taxable retail sales, the YOY growth rate has dropped from a year ago. In February 2018, growth was 5.9% YOY, or 2.7 points lower than the year period ending in February 2017. However, when compared to January 2018, it is up 1.4 points. Taxable retail sales reached $696.3 million in February, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth is 0.3 points higher than the overall Nevada average.
Success in business attraction and retention, and proximity to the Bay Area and the Pacific Northwest, is driving the region’s economy. It is the primary cause of growth in taxable retail sales, though increasing visitation has also contributed.
r better known
This month we continue the introduction of a new chart for Stat Pack. It displays Washoe County taxable sales generated in a selected sample of what we are calling the “better known” (“BK”) activities. We hope this will give readers an insight into the level of economic activity in familiar industries. Some of these sectors are not necessarily large generators of sales taxes, but we think readers will find them interesting.
In February 2018, Retail made up 63.5% of taxable sales of the BK industries and 60.8% of total sales in all sectors. Compared to February 2017, Retail is up 0.3 points as a share of BK sectors. Accommodation & Food/Beverage was the second largest (16.6% of BK sectors and 15.9% of total sales). Accommodation & Food/Beverage is down 0.3 points from February 2017’s 16.9% of the BK industries. Telecom and Media came in at a distant 3rd place with only 5.5% of the BK set, beating out last month’s 3rd place finisher, Manufacturing.
r single family
The Q1, 2018 median sales price of $368,000 for single-family home resales in the Reno-Sparks area represents a 16.8% jump YOY. Compared to the previous quarter the price grew by 5.3%. The Q1 median price is now approximately $54,730 (17.5%) greater than the $313,270 that would have resulted from using the 1990-2001 average annual appreciation rate of 4% per year. Last quarter the difference was $39,107. The Reno-Sparks median price is increasing rapidly. Housing affordability is a looming problem that should be monitored closely by public officials and community leaders for its potential negative impact on economic growth and business attraction.
r home resales
MLS home resales in Washoe County in March remained even with February on a 12MMA. When compared to March 2017, resales rose by 6.1%. For just over 3 straight years, home sales have been increasing on a YOY basis, with an average rate of growth of 4.1%. The rate rose 0.3 points in March compared to February. Over the last 6 months the average YOY growth rate is 5.5%, compared to 4.7% for the preceding 6 months.
The median sales price rose to $350,365 (12MMA) in March, a 12.9% jump from March 2017. By comparison, the Las Vegas median resale price in March also jumped by 12.9%; However, the Las Vegas price is much lower at $234,117. The looming housing affordability issue in both regions also applies to the new home market.
weekly earnings
The 12MMA of the nominal average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA grew $2 in March 2018 to $802, making 9 straight months of growth. When considered on a YOY basis the unadjusted weekly wage is up 1% from $794 in March 2017.
The inflation-adjusted (real) 12MMA wage for March 2018 of $684 is even with the previous month’s wage, but is -1% lower than the $691 recorded in March 2017. Reno-Sparks’ real wage has fluctuated between $682 and $686 for the last 11 months, unable to maintain an upward trend. In March, the region’s average weekly earnings were 2.4% higher than the Las Vegas average of $669. The real wage peak of the last 10 years occurred in May 2016 when it was $730.
r weekly hours
In March 2018, the Reno-Sparks MSA’s average weekly hours fell 0.2 points from 35.6 to 35.4, continuing a downward trend that began in October 2017. On a YOY basis, weekly hours are down -0.2 from March 2017. The 8-year peak happened in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours happened 3½ years ago in September 2014.
r unleaded
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of May 2, 2018 was $3.36, up $0.23 (7.3%) from $3.13 the previous month. When compared to the previous year the price of regular unleaded is up $0.47 (16.3%). Gas prices have been rising steadily and could impact resident and business spending in other areas of the local economy.
According to AAA, “Pump prices in the West Coast region are among the highest in the nation: Hawaii ($3.61), California ($3.61), Washington ($3.29), Alaska ($3.25), Nevada ($3.23) and Oregon ($3.19). On the week, prices in the region are mostly up; with Nevada (+7 cents) leading the way and Alaska (+2 cents) seeing the smallest gain. 
When looking at year-on-year increases, California (+62 cents) tops the list of all states in the country, followed by Arizona (+55 cents), Hawaii (+54 cents), Nevada (+52 cents), Oregon (+43 cents), Washington (+38 cents) and Alaska (+32 cents). 
For the fifth consecutive week, gasoline stocks in the region have fallen. At 29.6 million bbl for the week ending on April 20, inventories in the region are at their lowest point since November 2017. Although stocks are below the level they were at last year, they are still higher than the five year average for the region.
r gold
Per the World Gold Council, in April, the month-end spot price of gold (ounce of pure gold) increased by a little more than $4 (0.36%) to just under $1,293 on a 12MMA basis. On a monthly basis, gold prices have increased for 6 months straight. On a YOY basis, the price of gold is up 2.9%. Prices have been increasing on a YOY basis for the past 21 months. Though the YOY growth rate had been trending down, it has now increased for 5 straight months. The price of gold peaked in December 2012 at $1,678.
r emp to adult
Various sources often report employment-to-total population ratios, but that metric muddles the true ratio of workers to working-age population, because U.S. society is aging and the share of non-retirees is shrinking. Therefore, we present the employment-to-adult-working-age population ratio. This relates jobs the population cohort that is actually expected to work. It more accurately describes the employment situation in the region.
This chart shows that the region’s employment-to-adult-working-age population ratio saw its biggest increase in 2017 (+.016) since bottoming out in 2010. The most recent ratio is still well short of the 2007 peak 0f 0.521. It went as low as .455 during the depths (2010) of the Great Recession.
r pot
Excise tax revenues generated from marijuana sales through the first 8 months are $41.9 million. The $5.9 million in marijuana excise tax collected for the month of February 2018 was the biggest take since recreational legalization in July 2017. The most readily available data report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at point of sales at the dispensaries or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged to only recreational users purchasing marijuana at a dispensary.
According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million over 2 years. Tax revenues through 8 months are right on track to meet the 2-year goal. The major “know/unknown” is if the U.S. Justice Department will go through with its threats of curtailing or putting a halt to the industry’s activities nationally.

Reno-Sparks MSA Hits Near-peak Employment

As of February 2018, the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks increased to 99.3, just 0.5 points off January 2010’s record high. The pace at which Index had been rising has slowed considerably; this marks the first time it has budged in five months. What does this mean? The RCG Index compares the current employment rate to the peak employment rate via the 12-month moving average. In a nutshell, then, Reno is at about 99 percent of its peak employment rate.
Check out all the latest Reno-Sparks metrics, below.
r state highlights

r positive

r emp index
In February 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks increased to 99.3. At just 0.5 points below the record high, the pace at which the Index had been rising has slowed considerably. This is the first time it has budged in 5 months. The Index is up 0.8 points since February 2017. It peaked 11 years ago in December 2005 at 99.8 aka 100.0. The trough of 89.6 occurred in January 2010.
r job growth
In February Reno-Sparks job growth remained unchanged on a 12MMA from the month prior, holding at the new record high of 5.1%. The rate of growth is 0.6 points up from that recorded in February 2017. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%).The region’s previous record 12MMA high was in August 2016 when jobs grew by 4.9%. It subsequently dropped until climbing again to the current rate in May 2017.
The 12MMA headline unemployment has remained at 4.1% since December of last year. This was a welcome drop after 3 straight months when it remained the same. It had been falling every month by 0.1, sometimes 0.2 points, since September 2011, but the decline began to stall in August 2017. When compared to the February 2017 headline rate of 4.8%, this February’s rate was 0.3 percentage-points lower. In comparison, the rate in Las Vegas has not changed for the last 7 months, holding at 5.1% since August 2017. Reno’s latest rate has reached rates seen before the Great Recession.
r yoy construction
There were 84,775 Construction jobs in Nevada in February 2018. 16,958 (20%) of those jobs were in the Reno-Sparks MSA (12MMA). This is a notable jump of 13.8% from the 14,900 jobs reported in February 2017, and 70.5% of the peak (see below). Reno’s very healthy economy has produced strong residential and commercial real estate demand, and continues to contribute to an improving construction sector, but also to shortages of housing units and certain types of commercial space, especially industrial.
The latest stats show that 6.8% of the region’s payroll job-base is in Construction, a 0.1 point increase from the previous month. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs largely driven by the pre Great Recession real estate bubble. The sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
r visitor volume
Over a 12-month period ending in February 2018, visitors to Washoe County reached 5.16 million. YOY growth in visitation in Washoe County is outpacing growth in Clark County, where the rate of visitor growth continues to decline. We believe this is largely due to shortage of hotel rooms in Clark County.
In February 2018, YOY growth for Washoe County was 5.1%. By comparison, the YOY growth rate in Clark County for the month of February 2018 was -1.7%. Early in 2016, Washoe had been lagging behind Clark in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe beating those of Clark every month since June 2016 because of the supply constrained note above.
Washoe County has now seen YOY growth in visitor volume every month for more than 3 straight years (since January 2015) at an average rate of 2.9%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains and continues to grow stronger.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 4.7% in February 2018. This brings total revenue up to $69.9 million, or 78% of the peak (see below). In comparison, Clark County had a YOY growth rate of 3.3% this February. The YOY growth rate for Washoe County has been positive for more than 3 years straight at an average of 2.9%.
Gaming revenues peaked more than 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, the peak of 5.5% occurred in June 2006.
r taxable sales
While Washoe County’s economy continues to benefit from rising taxable retail sales, the YOY growth rate has fallen considerably from a year ago. In January 2018, growth was 4.5% YOY, or 6.2 points lower than the year period ending in January 2017. When compared to December 2017, it is up 0.6 points. Taxable retail sales reached $690.6 million in January, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth is 1.3 points lower than the overall Nevada average.
Success in business attraction and retention, and proximity to the Bay Area and the Pacific Northwest, is driving the region’s economy. It is the primary cause of growth in taxable retail sales, though increasing visitation has also contributed.
washoe taxable
This month, we introduce a new chart into Stat Pack. It displays Washoe County taxable sales generated in a selected sample of what we are calling the “better known” activities. We hope this will give readers an insight into the level of economic activity in familiar industries. Some of these industries are not necessarily large generators of sales taxes, but we think readers will find them interesting.
In January 2018, Retail made up 64% of taxable sales of the better known (“BK”) sectors and 61.2% of total sales in all sectors. Compared to January 2017, Retail is up 3.4 points as a share of BK sectors. Accommodation & Food/Beverage was the second largest (15.5% of BK sectors and 14.8% of total sales). Accommodation & Food/Beverage is down 0.4 points from January 2017’s 15.9% of the BK sectors. Manufacturing came in at a distant 3rd place with only 5.8% of the BK set.
home resales
MLS home resales in Washoe County rose 4 units to 569 on a 12MMA basis to kick off 2018. When compared to January 2017, this is an increase in resales of 5.3%. For nearly 3 straight years, home sales have been increasing on a YOY basis, with the rate of growth fluctuating between 4% and 7% during the previous 6 months. The rate rose 1.2 points in January compared to December. Over the last 6 months the average YOY growth rate is 5.6%, compared to 3.8% for the preceding 6 months.
The median sales price rose to $341,485 (12MMA) in January, an 11.6% jump from January 2017. By comparison, the Las Vegas median resale price in January jumped by 12.1% to $228,617. The looming affordability issue in both regions also applies to the resale market.
r housing opp
In Q4, 2017 the Housing Opportunity Index (“HOI”) for the Reno-Sparks MSA dropped 5.7 points from 49 in Q3 to 43.3 in Q4 on a four-quarter moving average (“4QMA”) basis. The U.S. index fell by just 0.1, from 59.5 to 59.4, during the same period. The Reno-Sparks 4QMA HOI is 16.1 points lower than the national number. On a YOY basis, the Reno-Sparks index fell 9.3 points from 52.6 in Q4, 2016.
Reno-Sparks’ HOI peaked at 85.8 in Q1, 2012. It bottomed out at 17.3 in Q4, 2006 at the peak of the housing boom. The 10-year average is 63.6. The region’s latest index is now 20.3 points below the 10-year average. There could be issues in the future if the index continues to deteriorate.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in the Reno-Sparks MSA, assuming standard mortgage underwriting criteria.
r weekly earnings
The 12MMA of the nominal average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA stalled in January 2018 after 8 straight months of growth, but in February resumed its climb and is up $2 (0.26%) to $800. When considered on a YOY basis the unadjusted weekly wage is up 0.7% from $795 in February 2017.
The inflation-adjusted (real) 12MMA wage of $684 is again up $1 from previous month’s wage, putting it -1.4% lower than the $693 recorded in February 2017. Reno-Sparks’ real wage has fluctuated between $682 and $686 for the last 10 months, unable to maintain an upward trend. In February, the region’s average weekly earnings were 2.4% higher than the Las Vegas average of $668.
r weekly hours
In February, the Reno-Sparks MSA’s average weekly hours fell 0.1 points from 35.6 to 35.5, continuing a downward trend that began in October 2017. On a YOY basis, weekly hours have seen little improvement from February 2017. The 8-year peak occurred in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours occurred 3 years ago in September 2014.
r unleaded
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of April 2, 2018 was $3.13, up $0.14 (4.9%) from $2.99 the previous month. When compared to the previous year the price of regular unleaded is up $0.27 (9.5%). Gas prices have been rising steadily and could impact resident and business spending in other areas of the local economy.
According to AAA, “Drivers in West Coast states are paying the highest pump prices in the nation: Hawaii ($3.52), California ($3.51), Washington ($3.17), Alaska ($3.13), Oregon ($3.09) and Nevada ($3.01). On the week, all drivers in these states saw an increase in prices at the pump. Arizona (+9 cents) saw the largest leap, while Hawaii (+1 cent) saw the smallest. 
At 1.59 million b/d, last week’s total gasoline production rate is nearly 60,000 b/d less than the rate last year at this time. According to the EIA’s latest weekly report, total gasoline inventories in the region declined by 36,000 b/d last week to sit at 32.7 million bbl. However, inventories may decline further with this week’s scheduled planned maintenance at the Phillips 66 Los Angeles Refinery, which can produce up to 147,000 b/d of gasoline.”
r gold
Per the World Gold Council, in March, the month-end spot price of gold (ounce of pure gold) increased by a little less than $7 (0.51%) to just under $1,289 on a 12MMA basis. On a YOY basis, the price of gold is up 2.4%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 20 months. Though the YOY growth rate had been trending down, it has now increased for 4 straight months.
r pot
Excise tax revenues generated from marijuana sales through the first 7 months are $34.9 million. The most readily available data report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at point of sales at the dispensaries or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged to only recreational users purchasing marijuana at a dispensary.
According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million over 2 years. Tax revenues through 7 months are right on track to meet the 2-year goal. The major “know/unknown” is if the U.S. Justice Department will go through with its threats of curtailing or putting a halt to the industry’s activities nationally.

Reno Employment Index Remains Near Record High

Without further ado, here are all the latest metrics from Northern Nevada. Stat Pack copublisher and RCG Economics Principal John Restrepo is available to answer questions at jrestrepo@rcg1.com.
r stat highlights

r positive

r emp index
In December the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks remained at 99.2 for the 3rd month in a row. At just 0.6 points away from the record high, the pace at which the Index had been increasing has slowed considerably. The Index is up 0.9 points since December 2016. The Index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.
r job growth
Reno-Sparks job growth on a 12MMA fell even further in the final month of 2017, dropping another 0.2 points from 2.8% to 2.6%. The rate of growth is 2.2 points lower than that recorded in December 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). In August 2016 the region’s job growth rate reached a record high of 4.9%, surpassing its previous high mark of 3.7% achieved in December 2006, but in December of 2016 the rate began to drop and has not stopped since.
The 12MMA of the headline unemployment saw a 0.1 point improvement, reaching 4.1% in December. This was a welcome drop after 3 straight months over which the rate remained the same. The rate had been falling reliably every month by 0.1, sometimes 0.2 points, since September 2011, but the decline began to stall in August of this year. When compared to the December 2016 headline unemployment rate of 5%, this December’s rate was 0.9 percentage-points lower. For the sake of comparison, the headline unemployment rate in Las Vegas has not changed for the last 5 months, holding at 5.1% since August. Reno’s unemployment rate is very near rates seen before the Great Recession.
r u3
The U-3 unemployment rate for Nevada, after seeing its first uptick in Q3 since Q2, 2016, fell back down by the 0.2 points it had risen last quarter, returning to an even 5% in Q4. The U-3 rate is now just 0.4 points above the average rate for 2007, the year the Great Recession hit. The U-6 rate fell 0.6 points from 11.4% in Q3 to 10.8% in Q4, a healthy decline and the biggest in over a year. Nevada’s U-6 rate is still the third highest in the nation, beating only New Mexico and Alaska. As shown in the chart, the spread between the two rates is generally tightening, albeit gradually, indicating that wage increases will continue to solidify.
In terms of the U-3 rate, Nevada improved a spot in Q4 and now has the 8th highest headline rate in the nation, tied with Ohio. In Q2 it was beating 13 other states.
r yoy construction
There were 85,358 construction jobs in Nevada recorded for December 2017. 15,300 of those were in the Reno-Sparks MSA (12MMA). This is 5.8% more than the 14,467 jobs reported the previous year in December 2016, and 63.6% of the peak (see below). Reno’s healthy economy has produced strong residential and commercial markets in the region, and this continues to benefit the construction sector.
The latest stats show that 6.7% of the region’s payroll job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. However, construction jobs were artificially inflated due to the housing bubble. The sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
r visitor volume
Over a 12-month period ending in December 2017, on an annualized basis, visitors to Washoe County reached 5.15 million. YOY growth in visitation to Washoe County is outpacing growth in Clark County, where visitor growth continues to decline. In December 2017 YOY growth was 5.2%. By comparison, the YOY growth rate in Las Vegas for the month of December was -1.7%. Early in 2016, Reno had been lagging behind Las Vegas in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe County beating those of Clark County every month since June 2016.
Washoe County has now seen YOY growth in visitor volume every month for nearly 3 straight years, since January 2015, at an average rate of 2.8%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 2.4% in December 2017. This brings total revenue up to $69.1 million, or 77% of the peak (see below). For comparison, Clark County had a YOY growth rate of 4% this December. The YOY growth rate for Washoe County has been positive for 3 years straight at an average rate of 2.9%.
Gaming revenues peaked more than 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.
r taxable retail
While Washoe County’s economy continues to benefit from rising taxable retail sales, the YOY growth rate has fallen considerably from a year ago. In November 2017, the rate of growth was 6.2% YOY, or 3.2 points lower than the year period ending in November 2016. However, when compared to the month prior, it is down 0.2 points. Taxable retail sales reached $686.8 million in November, having already surpassed, in March 2016, the previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth is very near the state average at just 0.4 points below.
Success in business attraction and retention is driving the region’s economy and is the primary cause of growth in taxable retail sales, though increasing visitation has also contributed.
Note: It will be interesting to see how adult-use marijuana sales will pan out relative to the taxes they will generate. The first of month of reporting occurred this July, but there has been a delay in releasing the data to the public. While still small relative to Nevada’s revenue-base, we will begin tracking the contribution that these sales are making to the base as soon as the data are available, likely next month.
r single family
The Q4, 2017 median sales price of $349,360 for single-family home resales in the Reno-Sparks area represents a 13.6% jump YOY. Compared to the previous quarter, the price changed very little, growing by just 0.1%. The Q4 median price is now approximately $39,107 (12.6%) greater than the $310,253 that would have resulted from using the 1990-2001 average annual appreciation rate of 4% per year. Last quarter the difference was $41,736. The Reno-Sparks median price is increasing rapidly. Housing affordability is a looming problem that should be monitored closely by public officials and community leaders for its potential negative impact on economic growth and business attraction.
r home resales
MLS home resales in Washoe County fell 3 units to 565 in December 2017 on a 12MMA basis. When compared to December 2016, this is an increase in resales of 4.1%. For more than 2½ straight years now home sales have been increasing on a YOY basis, though the rate of growth has been fluctuating between 4% and 7% over the previous 6 months, with the rate falling 1 point in December compared to November. Over the last 6 months the average YOY growth rate is 5.7%, compared to 3.3% for the preceding 6 months. The median sales price rose to $336,901 (12MMA) in December, a 10.9% increase from December 2016. By comparison, the Las Vegas median resale price in December increased by 11.4% to $225,900. The looming affordability issue also applies to the resale market.
r commercial
According to Colliers International, Reno-Sparks Office vacancy maintained its downward trajectory in Q4, 2017. Office vacancy fell 0.4 points from the previous quarter to 12.3% on a 4QMA basis, its lowest value since Q1, 2007. The Reno-Sparks Spec Office market has been improving, albeit slowly.
The Q4, 2017 Industrial vacancy rate also fell, reaching 7.1% in Q4. This was a drop of 0.7 percentage-points from 7.8%. After 5 consecutive quarters of increasing vacancy, the Industrial markets vacancy rate has now fallen 6 straight quarters. Vacancy is now comfortably below the 10% stabilized rate. Although a large amount of new product has recently come to market, there appears to be healthy demand in the Reno-Sparks MSA for Industrial space.
r weekly earnings
The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA is up $2 (0.28%) in December to $798. This is the 6th consecutive month that growth was positive after 11 months of negative growth. When considered on a YOY basis the unadjusted weekly wage is down -0.6% from $802 in December 2016.
The inflation-adjusted 12MMA wage of $684 is again up $1 from previous month’s real wage, putting it -2.6% lower than the $702 recorded in December 2016. This was the 2nd month in a row of real wage growth, interrupting a decline in the real wage that began in June 2016. In December Reno-Sparks’ average weekly real earnings were 2.4% higher than the Las Vegas average of $668.
r weekly hours
In December the Reno-Sparks MSA’s average weekly hours fell 0.1 points from 35.9 to 35.8, erasing the small gain made the previous month. Despite this small decrease, the general trend since October 2014 has been upward. When compared to December of last year, weekly hours are up 0.5 hours from 35.3. The 8-year peak occurred in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours occurred 3 years ago in September 2014.
r fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of February 2, 2018 was $2.92, up $0.10 (3.6%) from $2.82 the previous month. When compared to the previous year the price of regular unleaded is up $0.23 (8.5%).
According to AAA, “Six of the most expensive gas prices in the country are in the West Coast region: Hawaii ($3.39), California ($3.34), Alaska ($3.05), Washington ($2.99), Oregon ($2.89) and Nevada ($2.75). On the week, California (+7 cents) saw the region’s largest increase, while Washington, Oregon and Nevada each saw a 4 cent increase, Alaska jumped 2 cents and Hawaii increased by a penny. 
According to the EIA, gasoline stocks in the region dropped by the largest amount seen in the last 12 weeks – nearly 700,000 bbl. Inventories of gasoline sit at 33.9 million bbl, which is still 3.3 million bbl higher than last year’s level at the same time.”
r gold
Per the World Gold Council, in January, the end-of-month spot price of gold (ounce of pure gold) increased by just over $11 (0.92%) to just under $1,278 on a 12MMA basis. On a YOY basis, the price of gold is up 1.7%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 18 months. Though the YOY growth rate had been trending down, it has now increased for 2 straight months.
r pot
Excise tax revenues generated from marijuana sales through the first five months are $24.6 million. The most readily available data report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at point of sales at the dispensaries or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged to dispensaries’ recreational users.
According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million over 2 years. With tax revenue only expected to rise in the coming months, the state appears to be well on track to reach this goal. The major “know unknown” is if the U.S. Justice Department will go through with its threats of curtailing or putting a halt to the industry’s activities.

Northern NV continues positive economic trends

Here are all the latest stats and graphs for the Reno-Sparks MSA. As always, don’t hesitate to contact RCG Economics chief John Restrepo at jrestrepo@rcg1.com with questions or comments.
r stat highlights

r positive

r emp index
The RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks remained at 99.2 in November, establishing a trend over the past 6 months whereby the Index rises 0.1 every two months. At just 0.6 points away from the record high, the pace at which the Index had been increasing has slowed considerably. The Index is up one point since November 2016. The Index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.
r job growth
Reno-Sparks job growth on a 12MMA is dropping fast, falling another 0.4 points in November from 3.1% to 2.7%. The rate of growth is 2.2 points lower than that recorded in November 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region had surpassed its previous high mark of 3.7% achieved in December 2006, but has now fallen back down below this number and continues slipping.
The 12MMA of the headline unemployment rate is still stalled out at 4.2% in November, making this the 2nd month that the rate has remained unchanged. The rate had been falling reliably every month by 0.1, sometimes 0.2 points, since September 2011, but the decline began to stall in August of this year. When compared to the November 2016 headline unemployment rate of 5.1%, this November’s rate was 0.9 percentage-points lower. For the sake of comparison, the headline unemployment rate in Las Vegas has not changed for the last 3 months, holding at 5.1% since August. Reno’s unemployment rate is very near rates seen before the Great Recession.
r yoy construction
There were 84,417 construction jobs in Nevada recorded for November 2017. 15,200 of those were in the Reno-Sparks MSA (12MMA). This is 5.4% more than the 14,417 jobs reported the previous year in November 2016, and 63.2% of the peak (see below). Reno’s healthy economy has produced strong residential and commercial markets in the region, and this continues to benefit the construction sector.
The latest stats show that 7% of the region’s payroll job-base is in construction, down 0.2 points from last month. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. However, construction jobs were artificially inflated due to the housing bubble. The sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
r visitor
Over a 12-month period ending in November 2017, on an annualized basis, visitors to Washoe County reached 5.13 million. YOY growth in visitation to Washoe County continues to outpace growth in Clark County, where visitor growth continues to decline. In November 2017 YOY growth was 4.8%. By comparison, the YOY growth rate in Las Vegas for the month of November was -1.4%. Early in 2016, Reno had been lagging behind Las Vegas in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe County beating those of Clark County every month since June 2016.
Washoe County has now seen YOY growth in visitor volume every month for nearly 3 straight years, since January 2015, at an average rate of 2.7%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 2.8% in November 2017. This brings total revenue up to $68.7 million, or 77% of the peak (see below). The YOY growth rate has been positive for over 2½ years straight at an average rate of 2.9%.
Gaming revenues peaked 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.
r taxable retail
While Washoe County’s economy continues to benefit from rising taxable retail sales, the YOY growth rate has fallen considerably from a year ago. In October 2017, the rate of growth was 6.0% YOY, or 3.8 points lower than the year period ending in October 2016. When compared to the month prior, it is down 0.4 points. Taxable retail sales reached $679.4 million in October, having already surpassed, in March 2016, the previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth is very near the state average at just 0.6 points below.
Success in business attraction and retention is driving the region’s economy and is the primary cause of growth in taxable retail sales, though increasing visitation has also contributed.
Note: It will be interesting to see how adult-use marijuana sales will pan out relative to the taxes they will generate. The first of month of reporting occurred this July, but there has been a delay in releasing the data to the public. While still small relative to Nevada’s revenue-base, we will begin tracking the contribution that these sales are making to the base as soon as the data are available, likely next month.
r home resales
MLS home resales in Washoe County remained at 568 units in November 2017 on a 12MMA basis. When compared to November 2016, this is an increase in resales of 5.1%. For more than 2½ straight years now home sales have been increasing on a YOY basis, though the rate of growth has been fluctuating between 4.5% and 7.0% over the previous 6 months, with the rate falling 1.7 points in November compared to October. Over the last 6 months the average YOY growth rate is 5.8%, compared to 3.2% for the preceding 6 months. The median sales price rose to $333,151 (12MMA) in November, a 9.9% increase from November 2016. By comparison, the Las Vegas median resale price in November increased by 9.7% to $222,992. The looming affordability issue also applies to the resale market.
r weekly earnings
The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA is up $1 (0.29%) in November to $795. This is the 5th consecutive month when growth was positive after 11 months of negative growth. When considered on a YOY basis the unadjusted weekly wage is down -1.4% from $806 in November 2016.
The inflation-adjusted 12MMA wage of $683 is also up $1 from previous month’s real wage, putting it -3.4% lower than the $707 recorded in November 2016. This was the first month of real wage growth since May 2016. In November Reno-Sparks’ average weekly real earnings are now just 2.1% higher than the Las Vegas average of $669.
r weekly hours
In November Reno-Sparks MSA’s average weekly hours were unchanged from October, when they experienced a drop of 0.1 points from 35.9 to 35.8. Despite last month’s decline in average weekly hours, the general trend since October 2014 has been upward. When compared to November of last year, weekly hours are up 0.6 hours from 35.2. The 8-year peak occurred in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours occurred 3 years ago in September 2014.
r fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of January 4, 2018 was $2.84, down $0.05 (-1.8%) from $2.89 the previous month. However, when compared to the previous year the price of regular unleaded is up $0.18 (6.8%).
According to AAA, “Gas prices in the West Coast region remain among the most expensive in the country… According to EIA’s latest weekly report, the region’s refinery crude utilization rate hit a new record high at 96.3 percent, which is the highest level since the mid-2010s and well above the 80 percent rate seen at this time last year. In addition, gasoline inventories continue to measure above 30 million bbl. for a third week, positioning the region with a comfortable supply level as the year begins.”
r gold
Per the World Gold Council, in November, the end-of-month spot price of gold (ounce of pure gold) increased by nearly $9 (1.1%) to just under $1,254 on a 12MMA basis. Gold prices had gone up 14 straight months, from February 2016 to March 2017, but over the last 8 months the price has wobbled up and down with a net change of -$3. On a YOY basis, the price of gold is up 1.1%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 13 months, though the YOY growth rate has been trending down and is now the lowest it has been since July 2016.
r pot tax
Tax revenues generated from marijuana sales through the first four months are $19.1 million. The most readily available data report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at point of sales at the dispensaries or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged to dispensaries’ recreational users. According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million over 2 years. With tax revenue only expected to rise in the coming months, the state appears to be well on track to reach this goal. The major “know unknown” is if the U.S. Justice Department will go through with its threats of curtailing or putting a halt to the industry’s activities.

Northern Nevada Economic Metrics

Following is all the latest data for the Reno-Sparks Metro Statistical Area. Don’t hesitate to email Stat Pack co-publisher and RCG Economics Principal John Restrepo with questions at jrestrep0@rcg1.com.
r stat highlights

r positive

r emp index
The RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks stalled at 99.1 in September, halting its general upward trend. The pace at which the Index had been increasing has likely slowed because it is now just 0.7 points away from the record high. The Index is up 1.2 points since September 2016. The Index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.
r job growth
Reno-Sparks job growth on a 12MMA continues to trend down, falling 0.2 points in September from 3.6% to 3.4%. The rate of growth is 1.5 points lower than that recorded in September 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region had surpassed its previous high mark of 3.7% achieved in December 2006, but has now fallen back down below this number and keeps slipping.
After stalling at 4.3% in August, the 12MMA of the headline unemployment rate fell 0.1 points to 4.2% in September 2017. When compared to the September 2016 headline unemployment rate of 5.4%, this September’s rate was 1.2 percentage-points lower. For the sake of comparison, the headline unemployment rate in Las Vegas did not change for the month of September, holding at 5.1%. Reno’s unemployment rate continues to improve steadily and is very near rates seen before the Great Recession.
r u3
The U-3 unemployment rate, or headline rate, for Nevada saw its first uptick since Q2, 2016, rising by the same amount it did then: 0.2 points. The U-3 rate now sits at 5.2%, or 0.6 points above the average rate for 2007, the year the Great Recession hit. The U-6 rate fell just 0.1 points from 11.5% in Q2 to 11.4% in Q3, the smallest improvement in the U-6 rate since Q2 of 2015. Nevada’s U-6 rate is still the third highest in the nation, beating only New Mexico and Alaska. As shown in the chart, the spread between the two rates is generally tightening, indicating that wage increases will continue to solidify.
In terms of the U-3 rate, Nevada slipped several places in Q3 and now has the 7th highest headline rate in the nation. In Q2 it was beating 13 other states.
r yoy construction
There were 82,708 construction jobs in Nevada recorded for September 2017. 15,025 of those were in the Reno-Sparks MSA (12MMA). This is 5.5% more than the 14,242 jobs reported the previous year in September 2016, and 62% of the peak (see below). Reno’s healthy economy has produced strong residential and commercial markets in the region, and this continues to benefit the construction sector.
The latest stats show that 7.3% of the region’s payroll job-base is in construction, even with last month. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. However, construction jobs were artificially inflated due to the housing bubble. The sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
r visitor volume
September 2017 saw 424,158 visitors to Washoe County on a 12MMA basis. YOY growth in visitation to Washoe County continues to outpace growth in Clark County, where visitor growth continues to decline. In September 2017, YOY growth was 4.2%, a slight decrease from the 4.4% concerning the year period ending in August 2017. By comparison, the YOY growth rate in Las Vegas for the month of September was -0.8%. Reno had been lagging behind Las Vegas in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe County beating those of Clark County every month since June 2016.
Washoe County has now seen YOY growth in visitor volume every month for over 2½ straight years, since January 2015, at an average rate of 2.6%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 2.7% in September 2017. This brings total revenue up to $68.4 million, or 76% of the peak (see below). The YOY growth rate has been positive for over 2½ years straight at an average rate of 2.9%.
Gaming revenues peaked 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.
r taxable retail
While Washoe County’s economy continues to benefit from rising taxable retail sales, the YOY growth rate has fallen considerably from a year ago. In August 2017, the rate of growth was 6.3% YOY, or 4.3 points lower than the year period ending in August 2016. However, it is up 0.7 points when compared to the month prior. Taxable retail sales reached $677 million in August, having already surpassed, in March 2016, the previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth in August is closing the gap with the state average. Last month it was 1.7 points behind, while this month Nevada’s lead has shrunk to just 0.4 points.
Success in business attraction and retention is driving the region’s economy and is the primary cause of growth in taxable retail sales, though increasing visitation has also contributed.
Note: It will be interesting to see how adult-use marijuana sales will pan out relative to the taxes they will generate. The first of month of reporting occurred this July, but there has been a delay in releasing the data to the public. While still small relative to Nevada’s revenue-base, we will begin tracking the contribution that these sales are making to the base as soon as the data are available, likely next month.
r single family
The Q3, 2017 median sales price of $349,000 for single-family home resales in the Reno-Sparks area represents an 11.9% jump YOY and a 5.1% increase compared to Q2, 2017. The Q3 median price is now approximately $41,736 (13.6%) greater than the $307,264 that would have resulted from using the 1990-2001 average annual appreciation rate of 4% per year. Last quarter the difference was $27,695. The Reno-Sparks median price is increasing rapidly. Housing affordability is a looming problem that should be monitored closely by public officials and community leaders for its potential negative impact on economic growth and business attraction.
home resales
MLS home resales in Washoe County rose to 564 units in September 2017 on a 12MMA basis. Compared to September 2016, this is an increase in resales of 5.3%. For more than 2½ straight years now home sales have been increasing on a YOY basis, and the rate of growth now appears to be generally on the rise. After what was a brief leveling-off home sales have picked up steam again. Over the last 4 months the average YOY growth rate is 5.7%, compared to 3% for the 4 months preceding. The median sales price rose to $326,147 (12MMA) in September, a 9% jump from September 2016. By comparison, the Las Vegas median resale price in August increased by 8.8% to $218,408. The looming affordability issue also applies to the resale market.
r weekly earnings
The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA increased by $1 (0.08%) in September to $793. Despite the small increase, this is the third consecutive month where growth was positive, a good sign after 11 months of negative growth. When considered on a YOY basis the unadjusted weekly wage is down -2.8% from $816 in September 2016.
The inflation-adjusted 12MMA wage of $683 is unchanged from the previous month’s real wage, putting it -4.8% lower than the $717 recorded in September 2016. In September, Reno-Sparks’ average weekly real earnings were 2.5% higher than the Las Vegas average of $666, but Reno-Sparks’ advantage continues to shrink. Where Las Vegas’ average weekly real earnings are improving, Reno-Sparks’ are headed in the opposite direction. Inflation-adjusted wages have experienced a significant 6.4% drop from the recent record high in May 2016 of $730.
r weekly hours
Accompanying a decreasing weekly wage in the Reno-Sparks MSA are stagnant weekly hours, which in September were again unchanged from the previous month at 35.9. This is the 3rd straight month that weekly hours have remained the same. However, the overall trend since September 2014 has been upward. When compared to September of last year, weekly hours are up 0.7 hours from 35.2. The 8-year peak occurred in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours occurred 3 years ago in September 2014.
r fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of November 6, 2017 was $3.01, down $0.06 (-1.9%) from $3.07 the previous month. However, when compared to the previous year the price of regular unleaded is up $0.29 (10.5%). For comparison, gas in the Reno-Sparks MSA is $0.34 more expensive than in Las Vegas.
According to AAA, “Moving into the week, the West Coast continues to lead the U.S. among most expensive markets. Six of the top ten most expensive markets in the country are found in this region: California ($3.21), Hawaii ($3.17), Alaska ($3.09), Washington ($2.94), Oregon ($2.79) and Nevada ($2.73) 
In the EIA’s latest report, total gasoline stocks are below 28 million bbl, reaching a seven-week low at 27.6 million bbl. Additionally, EIA’s report showed that the refinery utilization rate of crude fell to 81.4 percent from 81.9 percent last week, which means less gasoline is being produced. With demand remaining high and supplies tightening in the region, prices are also being pushed up by these supply and demand factors.”
r gold spot
Per the World Gold Council, in October, the end-of-month spot price of gold (ounce of pure gold) fell less than $1 (-0.01%) to just over $1,245 on a 12MMA basis. After 14 straight months of increasing gold prices, 5 of the last 7 months have seen prices fall. On a YOY basis, the price of gold is up 1.2%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 13 months, though the YOY growth rate has been trending down and is now the lowest it has been since July 2016.

Clark, Washoe Counties in Top 170 for Incoming Investments

Positive economic growth for the state’s Big Two!
Both business and GDP growth are relatively strong for Clark and Washoe Counties when compared to counties in the rest of the country, according to a recent report by SmartAsset. The analysis measures and compares five key economic metrics:  incoming investment, business growth, GDP growth, new building permits, and federal funding. The five metrics are then combined to determine an “income investment index.”
Specifically, SmartAsset looked at the change in the number of businesses established in each county over a 3-year period as a measure of whether people are starting new business ventures in a county. They also measured real GDP growth (inflation adjusted) in the local economy, the number of new building permits per 1,000 homes, and federal funding received by each county in the form of contracts awarded to businesses, divided by the population.
Despite its overall U.S. ranking of 131 among U.S. counties, Clark is competitive with many of the Top 10 counties in both business growth (8.0 percent) and GDP growth (shown in millions):
clark1 In fact, Clark outperforms the national averages in the first three SmartAsset categories but its overall ranking is dragged down a bit by its lower than average per capita federal funding.
The following map from USASpending.gov shows that most federal contract money is concentrated in just a handful of states (2017-2018 data):
map1

Despite that concentration, Washoe County actually does quite well in this metric, with per capita federal funding well above the national average and better than almost every county on the Top 10 list.
 
washoe1
Business growth of “just” 4.1 percent is what holds back Washoe’s income investment index rating. While four percent is quite respectable as a general rule, the only county in the Top 10 with growth under 5 percent is Fairfax, VA – but it is buoyed by a disproportionate amount of federal funding, thanks to the fact that “local business” is government.
Clark and Washoe were the only counties in Nevada with index ratings in the high forties, keeping both regions close to the national average. Nevada’s other counties were in the thirties and forties. Here are the metrics for the 10 Silver State counties included in the study:
chart1
It is notable that the respective rankings of 131 and 169 for Clark and Washoe Counties look positively spectacular when compared with the top two counties from two of the nation’s most populous states. The top two counties in New York – Saratoga and Tompkins – are ranked 369 and 386 nationally. Illinois fares even worse, with its top two counties coming in at 387 and 477.
For comparison, here are the Top 10 U.S. counties according to the SmartAsset report, with Wasatch County, UT as the only Mountain West region to make the list. It’s also worth noting that L.A., which many Nevadans love to hate, ranked second nationally:
chart2
Finally, we took it upon ourselves to compare and rank the top two counties in the eight Brookings Instution’s Mountain West states by Incoming Investment Index. Clark ranked 7th out of 16 and Washoe ranked #9: 
Screenshot 2017-11-10 12.22.45
 
Here is how SmartAsset used its included economic metrics to create its index rankings:

We scored every county in our study on these four factors, weighting each factor equally. We then combined those scores to create a final ranking of cities. With that ranking, we created an index where the county with the most incoming investments was assigned a value of 100 and the county with the least investment activity received a zero.

Data sources for the SmartAsset analysis were:  U.S. Census Bureau County Business Patterns Survey, U.S. Bureau Economic Analysis, U.S. Census Bureau Building Permits Survey, USAspending.gov
 

Reno-Sparks Job Growth is Slowing

Most economic metrics in Northern Nevada remain positive, but job growth continues to trend downward, falling 0.3 points in August from 3.9% to 3.6%. The rate of growth is 1.2 points lower than that recorded in August 2016.
All the latest numbers are below.
r stat highlights

r positive

r new jobs
The FY2017 final results for EDAWN-assisted new jobs were adjusted to 3,323 jobs. This is a 3.8% improvement over the number of assisted new jobs in 2016. The FY2018 forecast also predicts 2,500 new jobs, a considerable drop from previous years. EDAWN’s latest data supports its success in enabling job growth and diversification. Note: These figures do not include jobs related to Tesla.
r emp index
After stalling in July, the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks ticked up by 0.1 points to 99.1 in August, resuming its general upward trend. The pace at which the Index has been increasing might slow since it is now just 0.7 points away from the record high. The Index is up 1.3 points since August 2016. The Index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.
r headline unemp
Reno-Sparks job growth on a 12MMA continues to trend down, falling 0.3 points in August from 3.9% to 3.6%. The rate of growth is 1.2 points lower than that recorded in August 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region had surpassed its previous high mark of 3.7% achieved in December 2006, but has now fallen back down below this number.
After falling for 8 months straight, the 12MMA of the headline unemployment rate held at 4.3% in August 2017. When compared to the August 2016 headline unemployment rate of 5.5%, this August’s rate was 1.2 percentage-points lower. The unemployment rate continues to improve steadily and is approaching rates seen before the Great Recession.
r yoy constr
There were 81,817 construction jobs in Nevada recorded for August 2017. 14,908 of those were in the Reno-Sparks MSA (12MMA). This is 5.4% more than the 14,142 jobs reported the previous year in August 2016, and 62% of the peak (see below). Reno’s healthy economy has produced strong residential and commercial markets in the region, and this continues to benefit the construction sector.
The latest stats show that 7.3% of the region’s job-base is in construction, up 0.1 point from last month. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. The construction sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
r visitor
There were 422,595 visitors to Washoe County in August on a 12MMA basis. YOY growth in visitation to Washoe County continues to outpace growth in Clark County, where visitor growth is trending down. In August 2017 YOY growth was 4.5%, an increase from the 3.6% concerning the year period ending in July 2017. By comparison, the YOY growth rate in Las Vegas for the month of August was -0.3%. Reno had been lagging behind Las Vegas in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe County beating those of Clark County every month since June 2016.
Washoe County has now seen YOY growth in visitor volume every month for over 2½ straight years, since January 2015, at an average rate of 2.6%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 2.3% in August 2017. This brings total revenue up to $67.9 million, or 76% of the peak (see below). The YOY growth rate has been positive for just over 2½ years straight at an average rate of 2.9%.
Gaming revenues peaked 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.
r taxable retail
Washoe County’s taxable retail sales continue to rise higher, a boon of the region’s strong economy However, the YOY growth rate has been dwindling, from 10.7% for the year period ending in January 2017 to 5.6% for the year period ending in July 2017. Taxable retail sales reached $668.7 million in July. Sales have surpassed their previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth in June fell behind an improving state average by a 1.7 percentage-point margin.
Success in business attraction and retention is driving the region’s economy and is the primary cause of growth in taxable retail sales.
Note: It will be interesting to see how adult-use marijuana sales will pan out relative to the taxes it will generate. The first of month of reporting occurred this July. While still small relative to Nevada’s revenue-base, starting next month, we will begin tracking the contribution that these sales is making to the base.
r home resales
MLS home resales in Washoe County rose to 567 units in August 2017 on a 12MMA basis. Compared to August 2016, this is an increase in resales of 7.0%. For more than two straight years now home sales have been increasing on a YOY basis, and the rate of growth now appears to be on the rise. After what was a brief leveling-off, home sales have picked up steam again. The median sales price rose to $323,939 (12MMA) in August, a 9.1% jump from August 2016. By comparison, the Las Vegas median resale price in August increased by 8.2% to $215,982. The looming affordability issue also applies to the resale market.
r weekly earnings
The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA increased by pennies (0.04%) in August, not enough to move it past the $792 recorded last month. Despite the small increase, this is the second consecutive month where growth was positive, a good sign after 11 months of negative growth. When considered on a YOY basis the unadjusted weekly wage is down -3.3% from $819 in August 2016.
The inflation-adjusted 12MMA wage of $683 is $1 less than the previous month’s real wage of $684, bringing it -5.2% lower than the $721 recorded in August 2016. In August, Reno-Sparks’ average weekly real earnings were 2.6% higher than the Las Vegas average of $665, but Reno-Sparks’ advantage continues to shrink. Where Las Vegas’ average weekly real earnings are improving, Reno-Sparks’ are headed in the opposite direction. Inflation-adjusted wages have experienced a significant 6.4% drop from the recent record high in May 2016 of $730.
r weekly hours
Accompanying a decreasing weekly wage in the Reno-Sparks MSA are stagnant weekly hours, which in August were unchanged from the previous month at 35.9. However, the overall trend since September 2014 has been upward. When compared to August of last year, weekly hours are up 0.7 hours from 35.2. The 8-year peak occurred in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours occurred in September 2014.
r fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of October 13, 2017, was $3.05, down $0.12 (-3.9%) from $3.17 the month prior. However, when compared to the previous year the price of regular unleaded is up $0.29 (10.4%). For comparison, gas in the Reno-Sparks MSA is $0.38 more expensive than in Las Vegas.
According to AAA, “Gasoline inventory levels reached a 4-month high, according to EIA’s latest report, growing to 29.3 million bbl. The increase is a surprise given planned maintenance at various refineries and healthy exports in the region that were expected to keep inventory growth low. Additionally, despite dropping from last week, the refinery utilization rate of crude remains high at 88.3 percent in the region. The utilization rate is likely to climb back up, as more refineries return to typical production rates when scheduled maintenance is completed.”
r gold
Per the World Gold Council, in September the end-of-month spot price of gold (ounce of pure gold) fell $3 (-0.26%) to just under $1,246 on a 12MMA basis. After 14 straight months of increasing gold prices, 4 of the last 6 months have seen prices fall. On a YOY basis, the price of gold is up 2.1%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 13 months, though the YOY growth rate has been trending down.
r adult working
Various sources often report employment-to-total population ratios, but that metric muddles the true ratio of workers to working-age population, because U.S. society is aging and the share of non-retirees is shrinking. Therefore, we present the employment-to-adult-working-age population ratio. This relates jobs the population cohort that is actually expected to work. It more accurately describes the employment situation in the region.
This chart shows that the region’s employment-to-adult-working-age population ratio for 2016 increased slightly from 2015. The most recent ratio is just short of the 2007 peak. It went as low as .52 during the depths (2010) of the Great Recession.

Northern Nevada Economic Metrics

 
stat highlights

positive

emp index
The RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks held at 99 in July. The Index is up 1.3 points since July 2016. The Index has stalled less than 1 point away from the peak after 69 straight months in which it increased by either 0.1 or 0.2 points. Despite this pause, we expect the general upward trend will continue; though, the pace at which the Index has been increasing might slow since we are nearing its record high. The index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.
headline unemp
Reno-Sparks job growth on a 12MMA continues to trend down, falling by 0.2 points in July from 4.1% to 3.9%. The rate of growth is 0.8 points lower than that recorded in July 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region had surpassed its previous high mark of 3.7% achieved in December 2006, but has now fallen back down close to this number.
The 12MMA of the headline unemployment rate fell by 0.1 points for the 8th month straight to 4.3% in July 2017. When compared the July 2016 headline unemployment rate of 5.6%, this July’s rate was 1.3 percentage-points lower. The unemployment rate continues to improve steadily and is approaching rates seen before the Great Recession.
yoy construction
There were 80,817 construction jobs in Nevada recorded for July 2017. 14,800 of those were in the Reno-Sparks MSA (12MMA). This is 5.5% more than the 14,033 jobs reported the previous year in July 2016, and 62% of the peak (see below). Reno’s healthy economy has produced strong residential and commercial markets in the region, and this continues to benefit the construction sector. The latest stats show that 7.2% of the region’s job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. The construction sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
visitor volume
There were 418,747 visitors to Washoe County in July on a 12MMA basis. YOY growth in visitation to Washoe County continues to outpace growth in Clark County, where visitor growth is trending down. In July 2017 YOY growth was 3.6%. By comparison, there was no YOY growth rate in Las Vegas for July. Reno had been lagging behind Las Vegas in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe County beating those of Clark County every month since June 2016.
Washoe County has now seen YOY growth in visitor volume every month for over 2½ straight years, since January 2015, at an average rate of 2.5%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. The Reno-Sparks hospitality industry is seeing some improvement despite continued challenges.
gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 1.4% in July 2017. This brings total revenue up to $67.3 million, or 75% of the peak (see below). The growth rate has been positive for just over 2½ years straight at an average rate of 2.9%.
Gaming revenues peaked 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.
taxable retail
Washoe County’s taxable retail sales continue to rise higher, a boon of the region’s strong economy. In June 2017 taxable retail sales reached $665.8 million. This was a 5.8% jump compared to June 2016 on a 12MMA basis. This represents over 5 years of rising retail sales on a YOY basis. Sales have surpassed their previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth in June fell behind an improving state average by a 1.3 percentage-point margin.
Success in business attraction and retention is driving the region’s economy and is the primary cause of growth in taxable retail sales.
home resales
MLS home resales in Washoe County rose to 555 units in July 2017 on a 12MMA basis. This is an increase in resales of 6.1% over the previous July. For more than 2 straight years now home sales have been increasing on a YOY basis, and the rate of growth now appears to be on the rise. After what was a brief leveling-off, home sales are picking up steam again. The median sales price rose to $320,606 (12MMA) in July, an 8.6% jump from July 2016. For comparison, the Las Vegas median resale price in July increased by 7.7% to $213,899. The looming affordability issue also applies to the resale market.
housing opp
In Q2, 2017 the Housing Opportunity Index (“HOI”) for the Reno-Sparks MSA fell 1.5 points from 50.1 in Q1 to 48.6 in Q2 on a four-quarter moving average (“4QMA”) basis. The U.S. index decreased 0.6 points from 60.9 to 60.3 during the same period. The Reno-Sparks 4QMA HOI is 11.7 points lower than the national number. On a YOY basis, the Reno-Sparks index fell 6.5 points from 55.1 in Q2, 2016.
Reno-Sparks’ HOI peaked at 85.8 in Q1, 2012. It bottomed out at 17.3 in Q4, 2006 at the peak of the housing boom. The 10-year average is 60. The region’s latest index is now just slightly higher than the 10-year average, which tells us that the housing market remains relatively affordable. However, if the index begins to deteriorate there could be issues in the future.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in the Reno-Sparks MSA, assuming standard mortgage underwriting criteria.
commercial vacancy
According to Colliers International, Reno-Sparks Office vacancy maintained its downward trajectory. In Q2 of 2017, Office vacancy fell 0.5 points from the previous quarter to 13.2% on a 4QMA basis, its lowest value since Q4, 2007. The Reno-Sparks Spec Office market has been improving, albeit slowly. By comparison, the Las Vegas Spec Office vacancy rate was 6.8 percentage-points higher at 20% in Q2, on a 4QMA basis.
The Q2, 2017 Industrial vacancy rate also fell, reaching 8.6% in Q2. This was a drop of 0.6 percentage-points from 9.2%. After 5 consecutive quarters of increasing vacancy, the Industrial markets vacancy rate has now fallen 4 straight quarters. Vacancy is now comfortably below the 10% stabilized rate. Although a large amount of new product has recently come to market, there appears to be healthy demand in the Reno-Sparks MSA for Industrial space. The Las Vegas Industrial vacancy rate is significantly lower at 5.5% in Q2 on a 4QMA basis; however, the Vegas rate has been ticking up since Q3, 2016.
weekly earnings
The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA rose $1 to $792 in July, though the wage had been trending downward for nearly a year prior, since July 2016. When considered on a YOY basis it is down -4.0% from $824 in July 2016.
The inflation-adjusted 12MMA wage of $684 is $1 less than the previous month’s real wage of $685, bringing it -5.8% lower than the $726 recorded in July 2016. In July, Reno-Sparks’ average weekly real earnings were 3.2% higher than the Las Vegas average of $663, but Reno-Sparks’ advantage continues to shrink. Where Las Vegas’ average weekly real earnings are improving, Reno-Sparks’ are headed in the opposite direction. Inflation-adjusted wages have experienced a significant 6.3% drop from the recent record high in May 2016 of $730.
weekly hours
While weekly earnings are decreasing in the Reno-Sparks MSA, weekly hours are increasing, ticking up by 0.1 points to 35.9 in July. When compared to July of last year, weekly hours are up 0.8 hours from 35.1. The 8-year peak occurred in July 2009 at 36.8 hours, while the trough (8-year) of 32.5 hours occurred in September 2014.
unleaded
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of September 6, 2017, was $3.14, up $0.12 (4.1%) from $3.02 the month prior. However, when compared to the previous year the price of regular unleaded is up $0.48 (18.3%).
According to AAA, “Hurricane Harvey may no longer be raining down on the Gulf Coast, but the storm’s impact continues to drive up gas prices across the country. At $2.65, the national gas price average is 27 cents more expensive on the week. Motorists in 26 states are paying 25 to 44 cents more for a gallon of unleaded compared to seven days ago. In fact, every state in the country has seen gas prices increase except four (Alaska, Idaho, Hawaii and Utah), where prices remain stable. Overall, gas prices are pennies away from topping the highest price ($2.67, August 15-18, 2015) Americans have paid for a gallon of gas in more than two years…. As Texas dries out from Harvey, all eyes are on Hurricane Irma, now a Category 5 hurricane. 
Despite being the region with the smallest gas price increases on the week, the West Coast continues to sell the most expensive gas. Gas prices on the West Coast increased as much as 12 cents on the week: California (+12 cents), Arizona (+9 cents), Nevada (+9 cents), Washington (+7 cents), Oregon (+6 cents), Alaska (+4 cents) and Hawaii (+3 cents)… the West Coast does not typically draw gasoline from the Gulf Coast and is not experiencing price spikes as compared to the East Coast.”
gold spot
Per the World Gold Council, the end-of-month spot price of gold (ounce of pure gold) barely changed from the month prior, increasing by just 0.02% ($0.21) in August 2017 to nearly $1,249, on a 12MMA basis. On a YOY basis, the price of gold increased by 3.8%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 13 months.

Reno-Sparks Metrics Continue Positive Trends

With the exception of average weekly wages, which are down over last year on both a nominal and inflation-adjusted basis (“real”), Northern Nevada is trending positive.
stat highlights

positive reno

emp index reno
The RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks rose to 99.0 in June. When compared to June 2016 the Index is up 1.4 points from 97.6. Our Index continues moving toward the peak and is now less than 1 point away. We expect the general upward trend will continue, maintaining the trajectory that started in 2011. The index peaked 11 years ago in December 2005 at 99.8. The trough of 89.6 occurred in January 2010.
job growth reno
Reno-Sparks job growth on a 12MMA has been trending downward since November of last year, but did not budge in June 2017, remaining at 4.1%. The rate of growth is 0.4 points lower than that recorded in June 2016. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region has surpassed its previous high mark of 3.7% achieved in December 2006.
The 12MMA of the headline unemployment rate fell by 0.1 points for the 7th month straight to 4.4% in June 2017. When compared the June 2016 headline unemployment rate of 5.7%, June’s rate was 1.3 percentage-points lower. The unemployment rate continues to improve steadily and is approaching rates seen before the Great Recession.
u3 reno
The U-3 and U-6 unemployment rates for Nevada saw healthy improvement in the 2nd quarter of 2017. The U-3 rate was down 0.6 points, from 5.6 to 5.0. The U-6 rate fell from 11.9% in Q1 to 11.5% in Q2. Despite the 0.4-point drop in the U-6 rate, Nevada still has the third highest U-6 rate in the nation, beating only New Mexico and Alaska.
In terms of the U-3 rate, Nevada is doing better than 13 other states, a considerable change from its previous ranking of 6th highest U-3 rate in the nation.
yoy reno
There were 80,042 construction jobs in Nevada recorded for June 2017. Of those, 14,717 were in the Reno-Sparks MSA (12MMA). This is 5.9% more than the 13,892 jobs reported the previous year in June 2016, and 61% of the peak (see below). A strong economy has led to very strong commercial and residential markets in the region. The latest stats show that 6.9% of the region’s job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. The construction sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
gross gaming reno
Washoe County’s 12MMA YOY gross gaming revenue grew by 2% in June 2017. This brings total revenue up to $67.1 million, or 75% of the peak (see below). The growth rate has been positive for 2½ years straight at an average rate of 3.0%.
Gaming revenues peaked 11 years ago in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.
taxable retail reno
Washoe County’s taxable retail sales are being pushed higher by the region’s healthy economy. In May 2017 taxable retail sales reached $662.7 million. This was a 6.4% jump compared to May 2016 on a 12MMA basis. This represents over 5 years of rising retail sales on a YOY basis. Sales have surpassed their previous peak on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth in May fell behind an improving state average by a 1.1 percentage-point margin.
Success in business attraction and retention is driving the region’s economy and is the primary cause of growth in taxable retail sales.
resales reno
MLS home resales in Washoe County rose to 551 units in June 2017 on a 12MMA basis. This is an increase in resales of 4.5% over the previous June. For more than 2 straight years now home sales have been rising on a YOY basis. After what was a brief leveling-off, home sales appear to be picking up steam again. The median sales price rose to $317,356 (12MMA) in June, an 8.3% jump from June 2016. For comparison, the Las Vegas median resale price in May increased by 7.2% to $211,724. The looming affordability issue also applies to the resale market.
avg earnings reno
The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA remained stuck at $791 in June, though the wage has been trending downward now for the past year, since July 2016. When considered on a YOY basis it is down -4.4% from $827 in June 2016.
Additionally, the inflation-adjusted 12MMA wage of $685 is $1 less than the previous month’s real wage of $686, bringing it -6.1% lower than the $729 recorded in June 2016. In June, Reno-Sparks’ average weekly real earnings were 2.3% higher than the Las Vegas average of $660, but Reno-Sparks’ advantage continues to shrink. Where Las Vegas’ average weekly real earnings are improving, Reno-Sparks’ are headed in the opposite direction. Inflation-adjusted wages have experienced a significant 6.2% drop from the recent record high in May 2016 of $730.
avg hours reno
Weekly hours in the Reno-Sparks MSA ticked up by 0.1 points to 35.8 in June after May’s brief pause in improvement. When compared to June of last year, weekly hours are up 0.7 hours from 35.1. The 8-year peak occurred in October 2008 at 37.1 hours, while the trough (8-year) of 32.5 hours occurred in September 2014.
fuel reno
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of August 1, 2017, was $3.01, down just $0.02 (-0.7%) from $3.03 the month prior. However, when compared to the previous year the price of regular unleaded is up $0.33 (12.3%).
According to AAA, “After notching the biggest one-week draw in nearly two and a half years, West Coast gasoline stocks are at their lowest level in seven months. Stocks tumbled 1.7 million bbl, bringing the region’s supply level to nearly 27 million bbl, according to the EIA. The tumble in stocks paired with potentially lower West Coast refinery runs, due to ongoing maintenance this week, means the regional decline in gas prices could be short lived and gas prices have the potential to increase in the coming days.”
gold reno
Per the World Gold Council, the end-of-month spot price of gold (ounce of pure gold) fell by -0.51% in July 2017 to $1,248, on a 12MMA basis. On a YOY basis, the price of gold increased by 5.1%. It peaked in December 2012 at $1,678. Prices have been increasing on a YOY basis for the past 12 months.