The RCG Jobs index 12-month moving average (“12MMA”) for Clark County increased by 0.1 points between May and June, and 1.5 points compared to June 2014. The index is steadily moving upward as the Valley’s “headline” jobless rate continues to drop.
The 12MMA in Clark County’s headline unemployment rate dropped 0.1 points in June compared to May. It was down 1.5 percentage-points compared to June 2014. However, the region’s Y-0-Y job growth rate remained unchanged at 3.5% compared to June 2014, and was down 0.1 points compared to May. The most recent spate of growth peaked at 3.9% and has declined for four months. However, this is not necessarily a bad sign as the growth rate is expected to slow as the economy nears equilibrium.
Construction jobs in Southern Nevada (Clark County) numbered 48,217 in June (12MMA), representing an increase of 5,292 jobs (12.3%) compared to June 2014. Construction activity continues to pick up. Jobs in this sector have now grown for 36 straight months.
June’s 12MMA gaming revenue (net of baccarat) of $684.2 million declined slightly compared to May ($684.5 million) but was up 1.5% relative to June 2014. That makes two months of Y-O-Y growth of at least 1.5%. This is the first consecutive months of such growth since October 2012. These net baccarat revenues are largely comprised of slot revenues, which generally reflect typical gaming spending of average Americans. However, slot revenues remain moribund for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35.
Mirroring the slowdown in home sales, the 12MMA 30-year fixed rate mortgage in the Western Region was down to 3.87% in July. This rate will remain relatively low as the Federal Reserve continues to try to stimulate consumer and business spending and demand.
Commercial vacancy rates in the Las Vegas Valley rebounded somewhat in Q2, 2015. The Industrial market rate continued to improve to 6.2%, also dropping on a 4-quarter moving average basis to 7.2% on the strength of the Warehouse/Distribution sector. This is a 0.9 percentage-point decrease compared to Q1, 2015. The Spec Office vacancy rate turned things back around and decreased 0.1 points to 21.6%, and fell on a 4-quarter moving average basis to 21.6% from 21.8% in Q1, 2015. The Anchored Retail rate remained 11.9%, as in Q1, 2015. The moving average of the rate, however, increased 0.1 points to 11.6%. Still, many office and retail properties that are well-designed and well-located are thriving. But there are others that were poorly conceived, poorly designed and poorly located that still anguish, and these are the projects that are keeping the overall vacancy numbers up.
Clark County 12MMA average weekly earnings (not inflation-adjusted) in June rose above $700, reaching $709, a 2.3% increase over June 2014. On an inflation-adjusted basis, earnings are starting to improve, up 1.5% in June compared to June 2014, to $630 in 2007 dollars, marking 12 months of improvement.
On a 12MMA basis, the number of weekly hours worked in Las Vegas (Clark County) was 33.2 hours in June, down 0.1 hours from May and 0.3 hours less than the 33.5 recorded in June 2014. As we’ve noted, stagnant and even dropping average hours worked have accompanied a dropping headline unemployment rate. Implication: Companies continue to depend heavily on part-time workers. For this reason, the U-6 unemployment rate (includes discouraged and part-time workers) in Nevada remains the nation’s highest at 15.3%.
According to AAA, as of July 29, the average price per gallon for regular unleaded gasoline dropped by 13.4% from $3.78 a year ago to $3.27. However, between June 29 and July 29, the price of unleaded increased slightly, by $0.06 per gallon, or 1.9%. Still, we expect gas prices to stay relatively stable and less expensive compared to one year prior over the summer.
After the raft of education reform bills passed by the 2015 Legislature, what better topic for the latest installment in our Q&A series with Nevada business and community leaders?
Happily, we found someone willing to give us his three cents with even more candor than we’d hoped. Please enjoy our worthwhile conversation with Brent Husson, executive director of Nevada Succeeds, a non-profit, nonpartisan coalition of business leaders committed to improving the state’s education system. If you have questions for Brent or want to get involved, you can email him at brent @ nevadasucceeds . org The Stat Pack: Of the education reforms passed this session, which one do you believe will have the biggest impact? Husson: In my opinion, the Read by 3rd Grade law (SB 391) is one that has very high potential to positively affect student outcomes. The biggest reason for this is that it addresses the core issue of literacy. If a child cannot read by 3rd grade, he/she is virtually assured to fail in school. Anything we do to make students more literate will have an outsized impact on their achievement for the rest of their school years, and really, on the rest of their lives. The hope for this bill comes from knowing that similar bills were passed in both Colorado and Florida, and in the school districts that implemented them well, we saw great gains. So the caveat here is that solid implementation is a must, but not a given. Nevada Succeeds is currently working with all involved parties to help ensure excellence in implementation. The Stat Pack: There are no real teeth in this new “Read by Three” initiative right now, so social promotion can still occur in the short-term. As such, can we really hope to see a substantial difference in statewide reading scores? How long before we see results? Husson: Actually we learned a lot from Florida on this. Our law was written with a delayed implementation of the retention piece, or so-called “teeth”, specifically because the states that have tried to retain kids without first providing the interventions proscribed in the law have since changed their laws due to unforeseen problems that threatened to derail the law entirely. In any event, a successful Read by 3rd Grade law is one that eliminates the need for retention; that is the focus of the new Nevada law and of Nevada Succeeds. I believe the initiative will help our reading-challenged kids, even with delayed retention, precisely because it is the interventions and not retention that affect literacy. Retention is simply one last chance for the adults to get it right. If we focus on getting the children what they need long before retention is necessary, then retention will be what it is supposed to be: a last resort. In Colorado and Florida, reading scores have increased significantly, especially in districts that have adequately embraced the interventions.
My concern about when we will see results from this policy does not come from the efficacy of the policy proscriptions, for they have been proven time and again. Rather, I am concerned that we do not have enough highly qualified teachers to move the policy into practice. We have thousands of very good teachers in Nevada, however, in CCSD alone, we are likely to begin the next school year with 1,000 teacher vacancies. These positions will either be filled by long-term subs or not filled at all. In addition, we will be employing over 1,000 first-year teachers. It doesn’t take much imagination to see that this poses a huge problem. The Stat Pack: Many conservatives who objected to more funding for all-day kindergarten say that while adding it has been shown to have some positive effect on student achievement in grades one and two, any positive effects disappear by later grades and that it is therefore a waste of public money. Is there any data to support that contention? Husson: The only study I am aware of that discusses the lasting effects (or lack thereof) of early childhood education was a federal study that looked at Head Start, which is a federally funded pre-K program, not full-day kindergarten. In any case, the truth is that education, at any level, is only worth the money if it is quality education, and quality education comes from quality educators. The quality and lasting impact of full-day kindergarten will truly depend upon the quality of Nevada’s teachers. If we have systems that can support our teachers so they can get the most out of each and every student, then the investment will be worthwhile. If it turns into babysitting, then we have made a poor investment for our kids. The Stat Pack: Is ending a cookie-cutter approach to class sizes worthy of further discussion? Don’t the benefits of smaller class sizes depend on numerous factors, like the age of the students?
Husson: I think it is worthy of discussion. There are many variables that effect quality of instruction, and class size is just one of them. When small class sizes are used to provide more targeted help for at-risk kids, the research shows that significant impact can occur, especially in the early grades. However, when class size becomes an end in itself, I think we unnecessarily cut ourselves off from many other creative approaches that can have tremendous impact on kids as well.
In some countries (including countries that have higher achievement than Nevada) they actually encourage larger class sizes, because it allows them a larger sample size with which to examine new methods. My point is that high student achievement should be the goal and class size can be one strategy, not the only strategy. The Stat Pack:What do you think will be the effects of the new Education Savings Accounts? What about recently publicized private school concerns that they are losing enrollment while parents/kids jump through the hoops necessary to qualify? Husson: I’ll take the second question first. There is likely to be some short-term disruption for some of the smaller, less financially sound private schools. If they lose significant numbers of kids because they have to comply with the 100-day rule (which has yet to be clarified by the legislative commission), they may not have enough revenue to operate. These schools will have to figure out a way to bridge that gap, or get the rules changed to help them manage that issue.
The answer to the first question is a little more complicated. In general, the effects of this policy will be to shift some education resources, and some kids, out of public schools. At Nevada Succeeds we always evaluate policies relative to their effects on student achievement. In this case, we think it is important to consider not just the achievement of the students who are able to use the money to leave the public schools, but also whether the shifting of resources has any effect on the achievement of the kids who remain in the public system.
“If a child cannot read by 3rd grade, he/she is virtually assured to fail in school.”
In my opinion, it is too early to draw any conclusions about what the results will be for either group of students. In the first case, there are too many unknowns about who will use the resources and how they will use them. In the latter case, we do not know if the resources that are left at the school are enough to cover the fixed costs that don’t go away when the child does. I believe the most important thing we can do now that the law has passed is to pay very close attention to the implementation and insist on transparent evaluation of the results for both groups of kids. That is why we are glad that all students who use an ESA must take a norm-referenced test so we can measure their outcomes in comparison to other students in the state.
The Stat Pack: The lodging and hospitality industry accounts for about 28% of the Nevada workforce. Do you think hospitality’s choice not to require that its workers have a high school diploma or even a GED is detrimental to improving the state’s work force? Husson: Since the beginning of the recession, we have seen more companies starting to require a high school diploma or a GED for more jobs, especially in the hospitality industry. I believe it is a step in the right direction for our state, as we want to continue to attract a skilled work force in all industries. Growth in the skilled workforce will produce positive ripple effects for Nevada. The Stat Pack:What crucial reform and/or funding subjects within education have still not been addressed by the Legislature? Is Nevada’s education system adequately funded with the new spending? If not, where is more money needed, or from where can money be cut and reapplied? Husson: Nevada Succeeds believes that the next issue that must be addressed in Nevada education is teacher effectiveness and since 90% of our districts’ operations budgets are spent on personnel, we think the adequate funding issue is directly related. This issue is incredibly complicated, and I could not do it justice in the space available here, but what I would like to do is let your readers know that Nevada Succeeds is targeting this issue in the run up to the 2017 legislative session. We are convening community leaders to come up with a plan to address the many issues that affect our teachers’ ability to do their jobs well.
At this initial stage, we have recruited what we are calling the Leadership Group. The group will be co-chaired by Lt. Governor Mark Hutchison and former Secretary of State Ross Miller. In addition, NSHE Chancellor Dan Klaich, State Superintendent Dale Erquiaga, CCSD Superintendent Pat Skorkowsky, CCEA Executive Director John Vellardita, WCSD Superintendent Traci Davis and I will all be serving on the committee. The purpose of this group will be to help focus the state on this important issue and to convene the folks necessary to get the problems fixed. This is the kind of issue that will take a united community effort to address, and I am excited that these fine leaders are gearing up to take on the challenge. The Stat Pack:Overall, is the “New Nevada” actually going to produce substantially better educational outcomes for our students? How long will it take for the state to show results? Husson: I believe the “New Nevada” will produce results. What we have at the moment are a host of policies that have a lot of potential. The reason I am bullish is that I have a tremendous amount of confidence in Dale Erquiaga and his team over at the Nevada Department of Education, as well as in the processes they are putting in place relative to rules, regulations and implementation. If we get the teacher effectiveness piece right, we should start to see signs in the next 2-3 years, but it will probably take 4-6 years for real outcomes to change. This year, only 37% of kids in the state were able to take the Smarter Balanced tests, so we don’t have widespread testing data. Next year will be our new baseline. Therefore, we won’t be able to measure growth until the 2016-2017 school year when we will update the star rating system.
“If we get the teacher effectiveness piece right, we should start to see signs of improvement in the next 2-3 years, but it will probably take 4-6 years for real outcomes to change.”
The Stat Pack: What is the role of Nevada businesses in all this education reform work? Does the business community do enough? Husson: I believe it is the duty of all Nevadans to take ownership of our education issues, and business is no exception. When the national news stories report that we rank 50th in one category after another, they do not report Brian Sandoval’s literacy rate, or Pat Skorkowsky’s graduation rate, they report the failures as Nevada’s failures. This reality negatively impacts business’s ability to recruit quality employees and the state’s ability to recruit more business. If we want this to change, we must all work to help fix the system. The Stat Pack: And finally… What keeps you up at night? Husson: The same statistic that caused me to get involved in this work in the first place: 40% of Nevada 4th graders are functionally illiterate. We have an obligation to educate these children, and we are failing. When the work we are doing moves that statistic significantly in the right direction, I will feel like we have accomplished something as a community. We are on the right track, but to get to the finish it will require all hands on deck.
In addition to being president of Nevada Succeeds, Brent Husson has been a small business owner in Las Vegas since 2001. His current venture, a partnership with Employee Benefit Management Services Inc., brings value based health benefit management to large employers in the southwest. Their main mission is to lower health care costs for their clients at a time when the rest of the industry is increasing by double digits. The mission of Nevada Succeeds is to bring a business perspective, through policy and advocacy, to the education debate. The organization is actively involved in the formation and implementation of education policy designed to improve student achievement in Nevada. You can contact Brent at email@example.com
$9.54 per hour (in list-topper Australia) after taxes x 40 hours = $381.60 in post-tax per-FT-work-week in G’day Mate! dollars. So… assuming vacations are paid, that’s $19,843 annual take-home for Aussie minimum-wage workers:
Switzerland’s stats are no surprise but we had no idea that nearly 23% of Luxembourg households are millionaires:
How far the mighty Athenians have fallen:
Related: The 11 cheapest Greek islands for sale.
Another type and trajectory of fall:
Note the absence of Iran:
We’re at the tipping point now:
The power of video games:
Scientists have discovered how the month you’re born matters for your health.
Who will reach capacity the fastest?
Nevada was one of five states to win a Golden Shovel award for excellence in economic development efforts from Area Development. Plus… Rankings of nearly 373 metro areas for job creation and sustainable economic development, also from Area Development, place Las Vegas and Reno-Sparks thusly (click on the graph to enlarge):
Governor Sandoval and the Governor’s Office of Economic Development are on a two-week trade mission to Europe.
The Annie E. Casey Foundation ranks the states for child well-being. Nevada is a dismal #47.
Las Vegas is among the U.S. cities with the fastest-growing millennial population.
Xtreme Manufacturing is expanding its manufacturing and assembly operations in Southern Nevada. The aerial boom manufacturer will locate its new 170,000 square foot facility in Henderson and is expected to hire 87 people.
Barclaycard Services is adding 150 jobs at its Henderson facility. Expansion plans also include adding 54,000 square-feet with an $8.2 million capital investment at its Henderson campus. A bill that easily passed the Legislature offers a partial abatement on property or sales and use taxes for companies that manufacture, assemble or service aviation parts. The Las Vegas Global Economic Alliance has details.
The price of getting married in Vegas just went up.
From the Nevada by the Numbers blog at RCG Economics, Nevada fared pretty well in the latest Bureau of Labor Statistics report.
The drunkest states during the summer. We’re no. 2!
Dear HighTower, Is massive inflation on the horizon due to all the government borrowing? Liz T.
There is no question that the national debt in the U.S. has risen dramatically over the past five years, as the government spent tremendous amounts of money in an attempt to pull the economy out of the great recession. According to the IMF, net national debt in the United States at the end of 2010 was roughly $10 trillion. At the end of 2014, that figure stood at nearly $15 trillion.
A significant amount of the debt issuance was purchased by the Fed, effectively creating money out of thin air. So why would the Fed embark on such a program? Simply stated, the Fed was terrified of deflation. While excess inflation can cause significant problems for an economy, deflation is by far the more feared outcome. Deflation leads to a vicious pattern of behavior in which economic activity grinds to a halt as everyone avoids purchasing goods and services for as long as possible due to the likelihood of prices being even lower in the future.
The Fed’s actions seemed to have removed the threat of deflation, but we are nowhere near a point of massive inflation in the U.S. economy. In fact, with current core PCE inflation readings of 1.2%, we are still running well below the Fed’s inflation target of 2%. There are a variety of factors for the weak inflation picture in the U.S., but two major economic forces are likely to keep inflation low in the U.S. for quite some time.
First, China’s investment slowdown is putting downward pressure on global commodity prices and this phenomenon will probably last for several years if not a decade or two. China simply over-invested in housing, commercial real estate, and infrastructure over the past 20 years and are now facing unprecedented levels of excess capacity. This will take a long time to work off and in the interim, commodity prices will stay under pressure.
Second, the strength in the U.S. dollar is effectively lowering the price of all imported goods. The U.S. imports nearly $3 trillion dollars of goods and services and a stronger dollar makes these imports less costly. We believe the dollar’s strength is here to stay as the U.S. economy is outperforming most of the other developed nations.
Given the macroeconomic backdrop, we don’t believe inflation is a major threat. In fact, the Fed would like to see inflation about 1% higher than it is today. In the event inflation begins to heat up, the Fed has never been better armed to combat it. The Fed has always controlled short rates, which can be raised to combat inflation, but the Fed’s influence on long rates has been less direct. After compiling a war chest of long-term treasuries over the past couple of years, the Fed is now armed with the ammunition to directly influence long rates as well. Thus, we believe the Fed has more tools at their disposal today to stop inflation in its tracks if it begins to rise to concerning levels.
HighTower Las Vegas provides successful families, businesses, and non-profit organizations a white glove wealth management experience that focuses on financial planning, investment management, estate planning, business retirement solutions and philanthropic consulting.
Macau’s downturn might be over; will it affect Nevada gaming?
The engine behind the World Series of Poker.
Nevada will now tax ticket sales for events and festivals like Burning Man and Electric Daisy Carnival. Tropicana Las Vegas is the right asset at the right price.
And ICYMI from an earlier edition of the Stat Pack:
Add the airport of the future to our Las Vegas wish list.
Clark County issued 400 film permits in 2014 compared to 343 in 2013 and 226 in 2010.
Competition for conventions heats up as 17 European nations band together to protect market share in the global meeting and convention business. (What happens in Vienna…?)
Still, the Top 100 Trade Shows in the U.S. include 38 that occur in Las Vegas.
Find the lowest gas prices in Las Vegas at VegasGasPrices.com and for Reno go here.
Following is a new monthly feature called “Ask HighTower.” We hope it provides valuable perspective and informs your thinking about the markets.
Dear HighTower Las Vegas, Should I be worried about this week’s dip in the markets? What, if anything, should I change about what I’m doing with my investment dollars? Sincerely, Liz T.
The market has been choppy so far this year, but what we are seeing is actually quite normal. It’s just a matter of perspective. We’ve been a bit spoiled by a period of extremely low volatility. Over the past 25 years, approximately one out of every four (25%) trading days saw the S&P 500 move up or down by more than 1%. However, from 2013-2014 that number fell to just 15% — so people began to expect consistent returns that are not actually the norm. So far in 2015, we’re back to a period of movement on roughly 25% of the days. It’s nothing out of the ordinary, but it feels much different than a couple of years ago.
The return to more normal market conditions is actually quite positive in our view, but investors need to understand or relearn what to realistically expect. On average, the market corrects (i.e., falls by more than 10%) about every 15 months, according to the Stock Trader’s Almanac. While those episodes can be painful, they are actually quite healthy. Corrections keep speculators from running rampant and help prevent bubbles from forming, which in the end are far more painful than the average correction when they pop.
Despite corrections and bear markets, stocks have proved time and time again to be a great source of wealth creation over time. The important thing to remember is those last two words: over time. At 44 months since our last major market correction, we are due for a market pullback. Should you run for the hills? We think not, unless your time horizon is too short to handle market volatility. Instead, we believe sticking to a well-crafted asset allocation that is consistent with your financial planning objectives is the better course of action.
Sure, there will be trying times along the way, but if you keep your emotions in check and remain committed to a well-designed strategy, you’ll have the odds of investment success strongly in your favor. HighTower Las Vegas is one of the most experienced and well-respected wealth management firms in the region with $700 million in assets under management. Feel free to call 702-567-5100 or email the HighTower office anytime for a friendly conversation with a HighTower advisor.
As summer kicks into triple-digit highs (is it hot enough for you, Nevada?), big news in the Battle Born state has not been lacking.
Under the leadership of Governor Sandoval, lawmakers passed a comprehensive tax bill that is estimated to raise an additional $1.3 billion for state coffers. Much of it is slated for improvements to our challenged public education system. The portfolio of taxes set to sunset at the end of this month were made permanent and will add about $375 million to $400 million over the next two years. The cigarette tax hike will add approximately $190 million over that same period. The new “commerce tax” levied on businesses with gross receipts above $4 million will add about $500 million to $510 million – but about half of that will be used to offset liabilities in Nevada’s payroll tax (aka the modified business tax or “MBT”). The commerce tax goes into effect July 1, but the economic impact will not be known for some time. We’ll be watching.
Last week, presidential hopefuls Hillary Clinton and Bernie Sanders were in Nevada wooing voters, and numerous Republican contenders are coming soon. On the national political stage, some guy named Trump also threw his bad hair into the ring. (Watch your backs, Jeb Bush and Marco Rubio. The Donald is coming for you!) Nevada remains key in the presidential primaries as an early caucus state – and in case you didn’t know, we are also a bit of a national bellwether when it comes to presidential elections. Since 1900, the Silver State has voted with the winner of the Electoral College more than 89% of the time (26/29).
Just down the road in the City of Angels, Kirk Kerkorian, the movie mogul and casino tycoon who founded MGM Resorts International, died last week at age 98. Last month, Forbes magazine estimated Kerkorian’s wealth at $4.2 billion. The son of poor Armenian immigrants had little formal education; he dropped out of school at age 16. (Don’t tell your kids.) Philanthropists like Kerkorian are few and far between. RIP.
And as families across the nation hit the road for their summer vacations, average national gas prices hover at/around $2.80 a gallon. Nevada’s prices are a bit higher, but hopefully not so much as to be prohibitive. Safe travels – and be on the lookout for a new and improved platform for The Stat Pack. Our brand new website will launch soon and will include more frequent updates as we strive to bring you the latest in Nevada’s economic, financial and business news.