Updated Reno-Sparks Metrics

Here are the latest updates to the Northern Nevada economic metrics we track, so you don’t have to. As always, feel free to reach out to John Restrepo at jrestrepo@rcg1.com with questions.
r stat highlights

r positive

r 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.
r 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.
r 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.
r visitor volume
The annualized visitor count for Washoe County increased 0.22% from April 2018’s 5.14 million to 5.15 million in May. With a YOY visitation growth rate of 3.7%, Washoe County continues to outpace growth in Clark County, which had a visitation growth rate in May of -1.8%. See Clark County commentary.
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 for the reasons previously noted in the Clark County Stat Pack section.
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 5.2% in May 2018. This brings total revenue up to $70.5 million, or 79% of the peak (see below). In comparison, Clark County had a YOY growth rate of 2.7% this May. 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%, corresponding to a similar growth streak in visitor volume.
Gaming revenues peaked nearly 12 years ago in June 2006 at $89.4 million. On an annual growth rate basis, the peak of 5.5% happened 12 years ago in May and June of 2006.
r taxable retail
Washoe County’s economy continues to benefit from rising taxable retail sales. In April 2018, growth was 6.9% YOY, just 0.1 points higher than the year period ending in April 2017. Compared to March 2018, the YOY growth rate is up 1.2 points. Taxable retail sales reached $705 million in April, 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 2.2 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 taxable sales
The above chart displays Washoe County taxable sales generated in a selected sample of what we are calling the “better known” (“BK”) activities. We hope this gives our 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 our readers will find them interesting. What is also interesting are the differences between Washoe and Clark Counties.
In April 2018, Retail made up 64.1% of taxable sales of the BK industries and 61.3% of total sales in all sectors. Compared to April 2017, Retail is up 1.3 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 1.3 points from April 2017’s 16.8% of the BK industries. Manufacturing came in at a distant 3rd place with 6.4% of the BK set.
r weekly earnings
The 12MMA of the nominal average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA grew $5 in June 2018 to $813. June was the 12th consecutive month of growth. When considered on a YOY basis the unadjusted weekly wage is up 2.8% from $791 in June 2017.
The inflation-adjusted (real) 12MMA wage for June 2018 of $688 is up $2 from the previous month’s wage. June’s wage is $3 higher than the wage recorded in June 2017. Reno-Sparks workers saw little wage growth over the year, a long-running problem for workers across the US. This has received attention by economists for some time. It is partially a function of the growth of the “gig economy” plus ongoing automation trends.
In June, the region’s average weekly earnings were 2.5% higher than the Las Vegas average of $671. Reno-Sparks’ real wage has fallen considerably from the $730 peak in May 2016, just over 2 years ago.
r 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.
r unleaded fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of July 13, 2018 was $3.44, down $0.02 (-0.7%) from $3.46 the previous month. When compared to the previous year the price of regular unleaded is up $0.51 (17.2%). Gas prices have been rising steadily and could impact resident and business spending in other areas of the local economy.
According to AAA, “Total crude oil stocks fell an astonishing 12.7 million bbl last week. The Energy Information Administration (EIA) has not recorded a decline of that size since October 2016. EIA data measures stocks at 405.2 million bbl, which are roughly 90 million bbl lower than they were at this time last year. This puts a continued spotlight on tightening U.S. supplies, which are likely to continue dropping as domestic demand for gasoline holds strong while crude and gasoline exports from the U.S. remain robust. If these trends continue amid high global crude demand, oil prices may continue riding high and contribute to increased pump prices throughout the summer and possibly into the fall. 
Pump prices in the West Coast region are among the most expensive in the country: Hawaii ($3.73), California ($3.66), Washington ($3.44), Alaska ($3.40), Oregon (3.32), Nevada ($3.24) and Arizona ($3.00). Most prices in the region have declined on the week, with Arizona (-2 cents) leading the group. 
Inventories of gasoline in the region fell for a third consecutive week, according to the Energy Information Administration’s (EIA) petroleum status report for the week ending on June 29. Dropping by nearly 150,000 bbl, total inventories now sit at 30.5 million bbl. However, inventories are approximately 2.2 million bbl higher than they were at this point last summer, which will likely help prices stabilize if there are any major supply disruptions in the region this week.”
r gold
Per the World Gold Council, in June, the month-end spot price of gold (ounce of pure gold) increased by less than $1 (0.05%) to just over $1,296 on a 12MMA basis. On a monthly basis, gold prices have increased for 8 months straight. On a YOY basis, the price of gold is up 3.3%. Despite last month’s small dip, the YOY growth rate has been trending up for 6 months straight. Prices have been increasing on a YOY basis for the past 23 months.
r pot
Nevada excise tax revenues generated from marijuana sales through the first 9 months are $55.5 million, with the most recent recorded month, April 2018, seeing a -7.69% decline in revenue from the previous month. April brought in about $6.6 million in combined retail and wholesale taxes, compared to $7.1 million in March. 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 in the first 2 years. Collections over the first 10 months indicate that the Department’s forecast is right on track.

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

positive

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.

Southern Nevada Economic Metrics Show Continued Positive Trends

From an uptick in construction jobs and new home sales to the growth of taxable sales to a bump in average weekly earnings, the Las Vegas MSA is firing on (nearly) all cylinders. If you missed it last month, please note that our newest economic chart — a breakdown of Clark County’s “better known” (“BK”) taxable sales activity — shows which industries/sectors are generating the most revenue.
v stat highlights

v positive

v emp index
In May 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) ticked up 0.1 points to 98.7, taking a step it had not made for 4 straight months and impelled by May’s impressive Las Vegas MSA job numbers. On a YOY basis the Index is up 0.5 points from April 2017. The Index is now just 1.3 points below the November 2006 peak of 100.
v job growth
The 12MMA of Clark County’s headline unemployment rate was 5.1% in May, a drop of 0.1 points after 4 months straight of a stagnant unemployment rate. The unemployment rate is 0.5 points below last May’s 5.6%. It reached its lowest level over 11 years ago in October 2006 when it was just 4%. Southern Nevada is now theoretically at “full employment.” Strong federal job numbers had foreshadowed May’s decline in unemployment for the Las Vegas MSA.
In May the 12MMA rate of job growth in the Las Vegas MSA held at 2.6% for the 3rd consecutive month. The job growth rate has been on a downward trajectory since September 2015. Analysis by the Brookings Institution posits job growth at the regional and national levels has been suffering from the same effect: the slowdown is mainly due to decreasing demand for unskilled labor. However, the economy continues to strengthen, performing better than some analysts had predicted. While President Trump’s economic policy of deregulation and tax cuts, and his willingness to add to the deficit, may be sustaining the strength of national job growth in the short-term, there are consequences looming down the road. Also, it will take some time to see the full impact of the Administration’s threatened tariffs.
v yoy construction
Construction in the Las Vegas MSA continues to be boosted by a strong housing market and improving commercial markets. In May 2018 the number of Southern Nevada construction workers rose by 4,917 (12MMA) from May 2017, an 8.7% increase. This was smaller than the previous month’s YOY increase of 9.3%. May’s gains put total construction jobs at 61,508. That makes 71 straight months (nearly 6 years) of construction job growth. Donald Trump’s decision to put tariffs on metals from the E.U., Canada and Mexico and industrial equipment from China, are likely to have an impact on Las Vegas’ construction industry.
In May 2018, construction jobs represented 6.2% of the region’s job-base, a drop of 0.4 points from the previous month and suggesting a construction worker shortage considering how much development is occurring in the region. During the real estate bubble of 2000-2007, construction jobs accounted for as much as an extraordinary 11.4% of all MSA jobs when construction jobs peaked at 108,833 in November 2006.
v visitor volume
In April 2018 the Las Vegas MSA’s 12-month visitor count (annualized) was 42 million. The number of visitors to Clark County rose in April for the first time in 11 months, though the increase was a miniscule 0.1%. On a YOY basis, this was the 9th month in a row visitation has declined. Visitation is April 2018 was down -1.9% when compared to April 2017. We believe that the primary reason for the slowdown is limited room capacity.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. So far through April of 2018 the visitor total is 13.8 million. That is lower than both 2016 (14.1 million) and 2017 (14.0 million) over the same time frame. Visitor growth slowed considerably in 2017 with a YOY visitor growth rate average through December of -0.1%. Over the first 4 months of 2018 the YOY growth rate is a disappointing -1.9%. The average rate of growth over 2016 was much better at 2.7%.
v convention
In April Clark County’s annualized convention attendance saw a 1.1% increase from the previous month, putting the annualized total at nearly 6.6 million. This increase does not quite make up for the previous month’s drop of 1.6%. However, when compared to April of last year, convention attendance is still up 5.7%. The annualized peak of 6.65 million convention attendees was in December 2017.
Convention attendance saw significant gains in 2016 with 10 months of above 10% YOY growth. Through all of 2017 the YOY rate of growth had fallen drastically to 3.9%. During the first 4 months of 2018 attendance grew by an average 5.2% YOY. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. The good news: In June 2017, the Las Vegas Convention and Visitors Authority’s Board of Directors gave final approval for an expansion and renovation of the Las Vegas Convention Center, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
v gaming rev
On a 12MMA basis gaming revenue net of baccarat was up 0.88% to 739.3 million in April. The streak of positive YOY growth was extended to 39 months straight with an increase of 2.6% from April 2017. April’s gaming revenues net of baccarat were nearly 89% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials under 35 have caused a decrease in slot revenues, they are now recovering because US household disposable income is finally rising in real terms.
v home sales
Of the 5,044 total home sales in April, 4,224 were resales of existing homes, while 820 were new home sales. According to Home Builders Research, in April, total (new and resales) Clark County home closings on a 12MMA were up 0.96% from the previous month. On a YOY basis total home sales were 7.5% higher than the previous year.
New home sales saw a YOY growth rate of 14.8% in April, up a full percentage-point from March. Existing home sales are growing steadily with a YOY growth rate in April of 6.2%, which is up 0.7 percentage-points from the month prior.
v median home price
Per Home Builders Research, April’s 12MMA median home price (new and resale) was $256,307, a 1.31% gain over the previous month. Compared to April 2017, the price is up 12.7%, the highest YOY growth in weighted home price since October 2014. The current median home price remains well below the peak of $305,333, which was recorded over 11 years ago in February 2007. April’s estimate is now nearly 84% of the peak price.
The median new home price was up 8.0% from the previous year, reaching a new peak in April of $353,822. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $237,117 in April, a 13.3% increase during the last 12 months. The peak of $286,833 occurred 11 years ago in April 2007. This means that the current resale price has now recovered almost 83% of its pre-recession peak. By comparison, the median resale home price in the Reno-Sparks MSA was over $115,000 higher at $354,540 (12MMA) in April 2018. Reno-Sparks MSA’s median home price (12MMA) also grew 13.3% YOY.
The rate of home appreciation for new and resale homes continued its rising trend in April. YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. Through the first four months of 2018 the YOY growth rate average is 12.1%. The annual peak of 35.8% growth occurred in February 2005.
v 30 yr fixed
The 12MMA 30-year fixed rate mortgage in the Western Region continues to climb. Another small increase in May of 0.05 puts the rate at 4.10% (12MMA). This was the 4th increase in a row after 2 straight dips, but the changes have not been drastic with the rate fluctuating between 3.97% and 4.10% over the last 9 months. The 10-year peak of 6.4% happened in October 2006. While the 30-year fixed rate mortgage should remain relatively low, it will likely go up because of Federal Reserve actions.
v case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 167.3 in March 2018, a rise of 9.4% compared to March 2017. The Las Vegas index has risen for 67 straight months while its YOY growth rate has been growing steadily since March 2017. The US index in March was again up 1.1 points, an increase of 6.1% compared to the previous year that puts the national index at 203.1. Both indexes have been on the rise since 2012.
The Las Vegas index peaked at 233.2 in December 2006. The latest LV index is 72% of the peak. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
v housing opp
The Housing Opportunity Index (“HOI”) for the Las Vegas MSA fell for the 5th straight quarter, this time by 1.6 points, decreasing to 60.5 points in Q1 of 2018 on a 4-quarter moving average basis. Over 5 quarters the Las Vegas HOI has dropped by a total of 7.2 points. Affordable housing is on the decline in the Las Vegas MSA. The Las Vegas HOI peaked at 86.2 in Q1, 2012. It bottomed out at 15.4 in Q1, 2007 at the height of the housing boom. The 10-year average is 70.1.
The U.S. index experienced a modest increase, growing from 59.4 in Q4, 2017 to 59.7 in Q1, 2018. Housing prices nationally appear to be stabilizing.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in Clark County, assuming standard mortgage underwriting criteria.
v commercial mtg
By the end of May, two of the three of equity indices re-entered positive territory for 2018. The DJIA, NASDAQ and S&P500 year-to-date have returned approximately -0.2%, 9.45%, and 2.35%, respectively. The persisting upward trend in the equity market appears to stem from a combination of earnings momentum paired with a cautious optimism regarding the future of the U.S. economy. Within the fixed income market, the 10-year U.S. Treasury and USD Swap rates accelerated to the 3.0% threshold and quickly fell back to less than 2.80%. The optimistic economic views are tempered by the constant rumble of trade conflict keeping investors on edge. In the final week of May, President Trump imposed steel and aluminum tariffs on Canada, Mexico, and the E.U. The expectation of retaliatory tariffs will potentially have long term effects on trade and the markets.
May was a reminder of the unpredictable nature of interest rates and fueled many commercial real estate investors to take action by quickly locking in rates at the current lower levels.
v taxable retail
Taxable retail sales continue to rise in Clark County; however, March’s YOY growth of 3.1% was the lowest since September 2011. Since reaching 5.0% YOY growth in May 2017, the YOY growth rate has been steadily declining. Taxable retail sales grew 0.22% when compared to last month. We believe much of the absolute growth in taxable sales is due to healthy visitor spending numbers and strong construction activity. Another record high was reached in March with just under $3.49 billion in sales on a 12MMA.
The consistent growth of taxable sales has given the local and state government more money to work with. The strength of the national economy and its local and regional markets are key to this improvement. Growing regional and national economies have driven Southern Nevada’s growth, benefiting all of its sectors. These larger economies are the primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region. We may now be witnessing the long-term trend rate for sales of around 3% per year.
v better known
We continue for a 3rd month the introduction of a new chart for Stat Pack and have made it a permanent addition to this report of notable economic indicators. It displays Clark 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/sectors. 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 56.1% of taxable sales of the BK sectors and 52.7% of total sales. Compared to March 2017, Retail was down 1 percentage-point as a share of BK sectors. Accommodation & Food/Beverage, an important sector for Clark County, was the second largest (27.8% of BK sectors and 26.1% of total sales) in March. The Accommodation & Food/Beverage industry is down 1.2 points from March 2017’s 29.0% share of the BK group. Manufacturing came in at a distant 3rd place with 4.6% of the BK set, with Real Estate not far behind at 4.0%.
v weekly earnings
The Las Vegas MSA’s 12MMA of average weekly earnings (not inflation-adjusted) was up by $3 for the 2nd month in a row, reaching $790 in May. This growth trend began over 3 years ago in September 2014. On a YOY basis, the 12MMA was up $30 (3.9%) from May 2017.
When looked at on an inflation-adjusted basis, earnings grew slightly in May from the month prior, increasing by $1 to $670 (in 2007 dollars). YOY real earnings rose by 1.7% ($11) in May 2018 compared to May 2017. Las Vegas’ average weekly real wage is now $81 (11%) below the most recent inflation-adjusted peak of $751 that occurred close to 11 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains closer to the trough than the peak.
v weekly hours
The number of average weekly hours worked in Las Vegas (Clark County) on a 12MMA dropped to 33.9 in May 2018, erasing the 0.1 point gain made the previous month. This is the first decline since March 2016. Weekly hours had been plodding upward since June 2016. On a YOY basis, average weekly hours are up 0.4 hours from May 2017.
In Q1, 2018, the U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.4-point drop. While this should suggest that business reliance on part-time workers continues to decrease, it very well might be that many of the new jobs being created are for part-time work.
Implication: Despite a 0.4 point-decrease in the U-6 unemployment rate in Q1, many companies continue to depend heavily on part-time workers and independent contractors. Despite what feels like a thriving economy and better than expected job numbers, employers may still feel reluctant to bring new employees in full-time, instead easing them into the company on a part-time basis. There is also the growth of the “gig economy” and widening automation. As a partial consequence, Nevada’s U-6 rate remains the nation’s 3rd highest at 10.4% as of Q1, 2018.
v unleaded
While the price of gas in Las Vegas was again up from a month ago, it appears to have topped out at the end of May and is stabilizing. As of June 8, the price of regular unleaded gasoline in the Las Vegas MSA was $3.32, which is still $0.07 (2.3%) higher than a month ago. Compared to last year, the price of unleaded is up $0.65. In last month’s analysis, the price had jumped by $0.27 (9.2%) in a month.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. Rising gas prices could have a deleterious effect on tourist spending in Las Vegas this summer.
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.”
v emp permit
A well-known housing market indicator is the employment-to-housing permit ratio, or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. After last month’s 0.1 point drop, the E-P Ratio for Clark County popped back up 0.4 points in April. Relative to April 2017, the E-P Ratio is up just 0.1 points from 1.4.
The general consensus among real estate analysts is that an E-P Ratio between 1.0 and 2.0 indicates a stable market. Clark County’s E-P Ratio has been in this range for nearly 1 ½ years, since October 2016.
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.

Latest Las Vegas Economic Metrics

Construction in the Las Vegas MSA continues to see strong numbers, thanks to a vibrant housing market and improving commercial markets. In March 2018 the number of Southern Nevada construction workers rose by 4,942 (12-month moving average/MMA) from March 2017, an 8.9 percent increase. March’s gains put total Southern Nevada construction jobs at 60,650 and ad mark 69 straight months (nearly 6 years) of construction job growth.
Read on for the rest of the numbers.
stat highlights

positive

emp index
In March 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) remained at 98.6 for the 3rd moth in a row. On a YOY basis the Index is up 0.5 points from March 2017. The YOY difference has fallen steadily from a recent high of 1.0 in April 2017. The Index is 1.4 points below the November 2006 peak of 100.
job growth
The 12MMA of Clark County’s headline unemployment rate was 5.2% in March, making this the 3rd month in a row that the rate has remained unchanged. The unemployment rate is 0.5 points below last March’s 5.7%. It reached its lowest level over 11 years ago in October 2006 when it was just 4%. Southern Nevada is now theoretically at “full employment.”
The 12MMA rate of job growth in the Las Vegas MSA fell 0.1 point for the 3rd consecutive month reaching 2.6% in March 2018. This continues the downward trajectory initiated in September 2015. Analysis by the Brookings Institution posits job growth at the regional and national levels has been suffering from the same effect: the slowdown is mainly due to decreasing demand for unskilled labor.
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 to 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 2017 increased slightly after a stagnant year in 2016. While the most recent ratio is up significantly from the 0.43 seen during the depths (2010) of the Great Recession, it is still well below the pre-recession peak in 2006 of nearly 0.49.
u3 & u6
The U-3 unemployment rate, or headline rate, for Nevada, after dropping 0.2 points in Q4, ticked back up by 0.1 points in Q1 2018. The U-3 rate is now 0.5 points above the average rate for 2007 (4.6%), the year the Great Recession hit. Despite the small rise in the U-3 rate, the U-6 rate, which measures underemployment, had a 0.4-point decline from 10.8 to 10.4.
In terms of the U-3 rate, Nevada fell behind several states and now has the 5th highest headline rate in the nation. While the U-6 rate saw welcome improvement, Nevada still holds the 3rd highest rate in the country, beating only New Mexico and Alaska. Nevada businesses maintain a significant reliance on part-time workers.
yoy construction
Construction in the Las Vegas MSA continues to be boosted by a strong housing market and improving commercial markets. In March 2018 the number of Southern Nevada construction workers rose by 4,942 (12MMA) from March 2017, an 8.9% increase, just 0.1 points lower than the YOY growth rate for the previous month. March’s gains put total construction jobs at 60,650. That makes 69 straight months (nearly 6 years) of construction job growth. While we have not heard much recently on Donald Trump’s idea to put tariffs on steel and aluminum, taxes on these imports could impact Las Vegas’ construction job growth.
Construction jobs represent 6.4% of the region’s job-base. The current construction job count is well below the November 2006 peak of 108,833, when the industry had 11.4% of all MSA jobs. Pre-2008 construction job numbers, which were artificially inflated due to the real estate bubble, are not likely to be seen again for foreseeable future.
visitor volume
In March 2018 the Las Vegas MSA’s 12-month visitor count (annualized) was 42 million. This is down -1.9% from 42.8 million during the 12-month period ending in March 2017. The number of visitors to Clark County fell in March for the 10th month in a row, this time by -0.9%. This is the 8th month in a row YOY visitation has declined. We believe that the primary reason for the slowdown is limited room capacity.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. So far over the first 3 months of 2018 the visitor total is 10.3 million. That is lower than both 2016 (10.5 million) and 2017 (10.4 million) over the same time frame. Visitor growth slowed considerably in 2017 with a YOY visitor growth rate average through December of -0.1%. Over the first 3 months of 2018 the YOY growth rate is a disappointing -1.9%. The average rate of growth over 2016 was much better at 2.7%.
convention attendance
In March, Clark County’s annualized convention attendance saw a -1.6% decline from the previous month, putting the annualized total at nearly 6.5 million. This decrease wipes out the previous month’s gain of 1.1% and means 2 out of the first 3 recorded months of 2018 have seen negative monthly growth. However, when compared to March 2017, convention attendance is still up 3.2%. The annualized peak of 6.65 million convention attendees was in December 2017.
Convention attendance saw significant gains in 2016 with 10 months of above 10% YOY growth. However, starting in October of 2016 YOY growth began to drop steadily until reaching a low in September 2017 of 1.1% YOY change. The YOY growth rate popped back up the following month and averaged 6.3% over the last 3 months of 2017. During the first 3 months of 2018 attendance grew by 5.0% YOY. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. The good news: In June 2017, the Las Vegas Convention and Visitors Authority’s Board of Directors gave final approval for an expansion and renovation of the Las Vegas Convention Center, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
gaming rev
On a 12MMA basis gaming revenue net of baccarat was down -0.32% to 732.9 million in March. However, YOY growth continues in March at 2.2%, a decline of 1.1 points from the year period ending in February 2018. This makes 38 months straight of positive YOY growth. However, the YOY growth rate has declined for 3 straight months. February’s gaming revenues net of baccarat were nearly 88% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials under 35 have caused a decrease in slot revenues, they are now recovering because US household disposable income is finally rising in real terms.
home sales
According to Home Builders Research, in March, total (new and resales) Clark County home closings on a 12MMA were up 0.8% from the previous month. On a YOY basis total home sales are still well above the previous year by 6.7%.
New home sales saw a YOY growth rate of 13.8% in March, down just 0.2 percentage-points from February. Existing home sales are growing steadily with a YOY growth rate in March of 5.5%, which is down 0.6 percentage-points from the month prior.
home price
Per Home Builders Research, March’s 12MMA median home price (new and resale) was $252,997, a 1.19% gain over the previous month. Compared to March 2017, the price is up 12.2%, the highest YOY growth in weighted home price since October 2014. The current median home price remains well below the peak of $305,333, which was recorded over 11 years ago in February 2007. March’s estimate is nearly 83% of the peak price.
The median new home price was up 7.3% from the previous year, reaching a new peak in March of $350,663. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $234,117 in March, a 12.9% increase during the last 12 months. This was the biggest YOY jump since September 2014. The peak of $286,833 occurred over 10½ years ago in April 2007. This means that the current resale price has now recovered almost 82% of its pre-recession peak. By comparison, the median resale home price in the Reno-Sparks MSA was over $115,000 higher at $350,365 (12MMA) in March 2018. Reno-Sparks MSA’s median home price (12MMA) is growing at 12.9% YOY.
The rate of home appreciation for new and resale homes continued its rising trend in March. YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. The 3 month YOY growth rate average for 2018 is 11.9%. The annual peak of 35.8% growth occurred in February 2005.
30 yr
The 12MMA 30-year fixed rate mortgage in the Western Region saw another small increase in April growing 0.05 points to 4.05% (12MMA). This was the 3rd increase in a row after 2 straight dips, but the changes have been miniscule with the rate fluctuating between 3.97% and 4.05% over the last 8 months. The 10-year peak of 6.4% happened in October 2006. While the 30-year fixed rate mortgage should remain relatively low, it will likely go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 165.7 in February 2018, a rise of 8.9% compared to February 2017. The Las Vegas index has risen for 66 straight months while its YOY growth rate has been growing steadily since March 2017. The US index in February was up 1.1, reaching 202.0, an increase of 6.1% compared to the previous year. Both indexes have been on the rise since 2012.
The Las Vegas index peaked at 233.2 in December 2006. The latest LV index is 71% of the peak. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
apartment market
The Las Vegas Valley’s 12MMA apartment vacancy rate bumped up to 7.7% in Q1 2018. The general trend since 2011 has been down, though apartment vacancy has fluctuated between 7.5% and 7.7% since Q4 2016. The recovery in apartment vacancy has been slow. Over the last 9 years, the apartment vacancy rate peaked at 10.8% in Q2, 2010. It hit its lowest mark of 5.1% 11 years ago in Q1, 2007.
commercial mtg
The 10-year U.S. Treasury moved slightly lower during March, finishing the month down 3 basis points from February. The 30-Day LIBOR did not track with the Treasury, increasing 21 basis points to 1.88%. The Fed increased the funds rate by 0.25 points on March 21st. This is the first rate hike under the new chair, Jerome Powell, who has been in office since February. At the March meeting, the Fed hinted it would favor a more aggressive pace to keep the economy moving forward in the years to come.  Additionally, a $1.3 trillion spending bill was passed by both the House and Senate, funding the government through September. The omnibus bill includes numerous non-spending policy provisions, as well as those affecting revenue.
Rising interest rates and the rumors of aggressive future Fed rate hikes are among the most common concerns for commercial real estate investors interested in competitive financing.
taxable retail
Local resident and business spending in Nevada and Clark County continues to be reflected in rising taxable retail sales. Since September 2017 the MOM growth rate has been rising steadily, while the YOY growth rate has remained relatively flat over the same period. We believe much of the absolute growth in taxable sales is due to healthy visitor spending numbers and strong construction activity. Another record high was reached in February with just over $3.48 billion in sales on a 12MMA, a 3.8% rise from last year.
February’s taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government revenues and spending. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the state of the regional and national economies, which have driven Southern Nevada’s growth, benefiting all of its sectors. They are also primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region. However, with visitor and convention growth experiencing declines, we may see this impact the growth of taxable retail sales.
better known
We continue for a second month the introduction of a new chart for Stat Pack and are making it a permanent addition to this report of notable economic indicators. It displays Clark 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/sectors. 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 57.4% of taxable sales of the BK sectors and 54.4% of total sales. Compared to February 2017, Retail was up 0.8 percentage-points as a share of BK sectors. Accommodation & Food/Beverage, an important sector for Clark County, was the second largest (27.4% of BK sectors and 26% of total sales) in February. Accommodation & Food/Beverage industry is down 1.3 point from February 2017’s 28.7% share of the BK group. Manufacturing came in at a distant 3rd place with only 4.5% of the BK set, up from 3.9% last year.
weekly earnings
The Las Vegas MSA’s 12MMA of average weekly earnings (not inflation-adjusted) was up by $2 in March to $784. This growth trend, which began 3½ years ago in September 2014, continues. On a YOY basis, the 12MMA was up $28 (3.8%) from March 2017.
When looked at on an inflation-adjusted YOY basis, earnings rose by 1.7% ($11) in March 2018 compared to March 2017, reaching $669 (in 2007 dollars). However, when compared to February 2018, real earnings remained nearly the same, growing by just $0.76. Las Vegas’ average weekly real wage is now $82 (11%) below the most recent inflation-adjusted peak of $751 that occurred more than 10½ years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains much closer to the trough than the peak.
weekly hours
After 3 straight months stuck at 33.9, the number of average weekly hours worked in Las Vegas (Clark County) on a 12MMA basis finally saw an increase, albeit a small one. Weekly hours reached 34 in March 2018. Weekly hours have been climbing slow and steady since June 2016. On a YOY basis, average weekly hours are up 0.6 hours from March 2017.
In Q1-2018, the U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.4 point drop. This suggests business reliance on part-time workers continues to decrease, which is an important factor that contributes to improving average weekly hours. The 7-year peak of 36.9 hours occurred more than 9 years ago in October 2008.
Implication: Despite a decreasing U-6 unemployment rate, many companies continue to depend heavily on part-time workers and independent contractors. For this reason, Nevada’s U-6 rate remains the nation’s 3rd highest at 10.4% as of Q1, 2018. However, a dropping U-6 rate does seem to be benefiting weekly hours worked through 2017 and into 2018 as the chart shows.
unleaded
Gas prices in Las Vegas have been climbing fast over the past 3 months. As of April 30, Las Vegans saw the price of regular unleaded gasoline in the Las Vegas MSA increase by $0.27 (9.2%) from the prior month, resulting in a per gallon price of $3.23. The price of regular unleaded has gone up $0.53, or 20%, from a year ago. This is likely to have a dampening effect on other types of resident and business spending.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. Rising gas prices could have a deleterious effect on tourist spending in Las Vegas this summer.
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.”
electric
Electric meter hookups’ 12MMA in February 2018 reached 812,694. Total hookups were up 1.8% from February 2017. The YOY growth rate has been a consistent 1.8% for 5 months straight. Over the last 29 months the annual growth rate for electric meter hookups has slowly fluctuated between 1.7% and 1.9%. This hints at stable population and business growth, and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.
emp permit
A well-known housing market indicator is the employment-to-housing permit ratio, or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. After 3 months at 1.3, the E-P Ratio for Clark County experienced a 0.1-point drop to 1.2 in March 2018. Relative to March 2017, the E-P Ratio is down 0.8 points from 2.
The general consensus among real estate analysts is that an E-P Ratio between 1.0 and 2.0 indicates a stable market. Clark County’s E-P Ratio has been in this range for nearly 1 ½ years, since October 2016.
pot
Nevada excise tax revenues generated from marijuana sales through the first 8 months are $41.9 million, with the most recent recorded month, February 2018, generating the most tax revenue since legalization for recreational use in July 2017. 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 8 months indicate that the Department’s forecast is right on track. The major “know/unknown” is if the U.S. Justice Department goes through with its threats of curtailing or putting a halt to the industry’s activities around the country.

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.

Southern Nevada Jobs Hold Steady, Mixed Bag in Other Metrics

The 12-month moving average (MMA) of Clark County’s headline unemployment rate was 5.1 percent in February, the 7th month in a row that the rate has remained unchanged. The unemployment rate is 0.5 points below last February’s 5.6 percent. It reached its lowest level in October 2006 when it was just 4 percent. Southern Nevada, like Reno-Sparks, is now theoretically at “full employment.”
A fun addition to this month’s charts: Nevada excise tax revenues generated from marijuana through the first 7 months of sales are $34.9 million. (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.) According to the Tax Department, tax revenue from the sale of marijuana is expected to reach $120 million during the next two years.
stat highlights

positive

emp index
In February 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) did not budge, holding at 98.7 for 7 straight months. On a YOY basis, the Index is up 0.5 points from February 2017, with the YOY gains continuing to dwindle as the Index remains unchanged. After reaching 1.3 in June of this year, the YOY difference has fallen steadily as the Index remains stagnant. The Index remains 1.3 points below the November 2006 peak of 100.
job growth
The 12MMA of Clark County’s headline unemployment rate was 5.1% in February, making this the 7th month in a row that the rate has remained unchanged. The unemployment rate is 0.5 points below last February’s 5.6%. It reached its lowest level over 11 years ago in October 2006 when it was just 4%. Southern Nevada is now theoretically at “full employment.” Considering this is the longest steady streak seen since the Great Recession hit approximately 11 years ago, we may be seeing the new normal in terms of unemployment post recovery.
The 12MMA rate of job growth in the Las Vegas MSA fell 0.1 points to 2.7%, continuing a downward trajectory begun in September 2015. Analysis by the Brookings Institution posits job growth at the regional and national levels has been suffering from the same effect: the slowdown is mainly due to decreasing demand for unskilled labor.
yoy construction
Construction in the Las Vegas MSA continues to be boosted by a strong housing market and improving commercial markets. In February 2018 the number of Southern Nevada construction workers rose by 4,958 (12MMA) from February 2017, a 9% increase, putting total construction jobs at 60,225. That makes 68 straight months (nearly 5 years) of construction job growth. However, President Donald Trump’s proposed tariffs on steel and aluminum may put a damper on Las Vegas’ construction job growth.
Construction jobs represent 6.4% of the region’s job-base. The current construction job count is well below the November 2006 peak of 108,833, when the industry had 11.4% of all MSA jobs. Pre-2008 construction job numbers, which were artificially inflated due to the real estate bubble, are not likely to been again for foreseeable future.
visitor volume
In February 2018 the Las Vegas MSA’s 12-month visitor count (annualized) was 42.1 million. This is down from the 42.8 million during the 12-month period ending in February 2017. The number of visitors to Clark County fell in February for the 9th month in a row, but the drop was small, this time by just -0.03%. When compared to February 2017, there was -1.7% YOY growth. This is the 7th month in a row YOY visitation has declined. We believe that the primary reason for the slowdown is a room capacity issue.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. So far over the first 2 months of 2018 the visitor total is 6.5 million. That is lower than both 2016 (6.8 million) and 2017 (6.7 million) over the same time frame. Visitor growth slowed considerably in 2017 with a YOY visitor growth rate average through December of -0.1%. The average rate of growth over 2016 was much better at 2.7%. We believe we have now entered a sustained period of slower growth. The month of greatest YOY growth since the Great Recession was September 2011, when visitor volume grew by 4.5%.
convention
In February, Clark County’s annualized convention attendance saw a 1.1% gain from the previous month, putting the annualized total at 6.6 million. This increase was unable to make up for the -1.9% drop seen last month, and it puts the 12 month period ending in February 2018 slightly below the new record high of 6.65 million attendees during the 12 month period ending in December 2017. Compared to February 2017, convention attendance is up 6.4%. The previous annualized peak of 6.35 million was in January 2007.
Convention attendance saw significant gains in 2016 with 10 months of above 10% YOY growth. However, starting in October of 2016 YOY growth began to drop steadily until reaching a low in September 2017 of 1.1% YOY change. The YOY growth rate popped back up the following month and averaged 6.3% over the last 3 months of 2017. During the first 2 months of 2018 attendance grew by 5.9%. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. The good news: In June 2017, the Las Vegas Convention and Visitors Authority’s Board of Directors gave final approval for an expansion and renovation of the Las Vegas Convention Center, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
hotel rev
In January 2018, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $115.31, a gain of $0.72 (0.63%) from the previous month. This ends a four-month streak of negative monthly growth. Compared to January 2017, RevPAR is up $2.53 (2.2%), which continues its streak of YOY growth that began just over 7 years ago in December 2010. With January’s improvement in RevPar, the RevPAR 12MMA resumes its approach of the $119.43 peak which occurred in December 2007.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev
On a 12MMA basis gaming revenue net of baccarat was down -0.19% to 735.2 million in February. However, YOY growth continues in February at 3.3%, a small decline of 0.1 points from the year period ending in January 2018. This makes 37 months straight of positive YOY growth. February’s gaming revenues net of baccarat were 88.1% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials under 35 have caused a decrease in slot revenues, they are now recovering because US household disposable income is finally rising in real terms.
home sales
According to Home Builders Research, in February, total (new and resales) Clark County home closings on a 12MMA were down -0.25% from the previous month, making this the 2nd in 3 months the 12MMA has declined. However, on a YOY basis total home sales are still well above the previous year by 7.3%.
New home sales saw a YOY growth rate of 14% in February. While this rate is high, it is down 3 percentage-points from the previous month, continuing a downward trend in the YOY growth rate that began in August 2017. Existing home sales are growing steadily with a YOY growth rate of 6.1%. However, February’s YOY growth rate for existing home sales was the lowest seen since May 2015.
home price
Per Home Builders Research, February’s 12MMA median home price (new and resale) was $250,016, a 1.09% gain over the previous month. Compared to February 2017, the price is up 12%, the highest YOY growth in weighted home price since October 2014. The current median home price remains well below the peak of $305,333, which was recorded 11 years ago in February 2007. February’s estimate is nearly 82% of the peak price.
The median new home price was up 7.1% from the previous year, reaching a new peak in February of $348,388. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $231,283 in February, a 12.7% increase during the last 12 months. This was the biggest YOY increase since September 2014. The peak of $286,833 occurred over 10½ years ago in April 2007. This means that the current resale price has now recovered over 80% of its pre-recession peak. By comparison, the median resale home price in the Reno-Sparks MSA was over $110,000 higher at $341,485 (12MMA) in February 2018. Reno-Sparks MSA’s median home price (12MMA) is growing at 11.6% YOY.
The rate of home appreciation for new and resale homes continued its rising trend in February. YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. The 2 month YOY growth rate average for 2018 is 11.8%. The annual peak of 35.8% growth occurred in February 2005.
mortgage
The 12MMA 30-year fixed rate mortgage in the Western Region was nearly unchanged, rising by just 0.02 points to 4% (12MMA) in March. This was the 2nd increase in a row after 2 straight dips, but the changes have been miniscule with the rate fluctuating between 3.97% and 4.02% over the last 7 months. The 10-year peak of 6.4% occurred in October 2006. While the 30-year fixed rate mortgage should remain relatively low, it will likely go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 164.2 in January 2018, a rise of 8.5% compared to January 2017. The YOY growth rate has been picking up steadily since March 2017. This past January, the trend continued with the rate rising by 0.4 points from December. The US index in January was up 1.0 again, reaching 200.9, an increase of 6% compared to the previous year. The Las Vegas index peaked at 233.2 in December 2006. The latest LV index is 70% of the peak. Both indexes have been on the rise since 2012. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
housing opp
The Housing Opportunity Index (“HOI”) for the Las Vegas MSA has now dropped 4 straight quarters after 7 quarters of increases, falling to 62.1 points in Q4 of 2017 on a 4-quarter moving average basis, or 72% of its peak. It dropped 0.6 points from 67.7 in Q1, another 0.8 points in Q2, 2.5 points in Q3 and 1.7 points in Q4. Affordable housing is on the decline in the Las Vegas MSA. The Las Vegas HOI peaked at 86.2 in Q1, 2012. It bottomed out at 15.4 in Q1, 2007 at the height of the housing boom. The 10-year average is 70.1.
The U.S. index experienced a more modest decline, falling from 59.5 in Q3, 2017 to 59.4 in Q4, 2017. Housing prices nationally appear to be stabilizing.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in Clark County, assuming standard mortgage underwriting criteria.
commercial mtg
The 10-year U.S. Treasury rose an additional 7 basis points in February and the 30-Day LIBOR followed suit, increasing 10 basis points to 1.67%. The FOMC will pay close attention to the impact of fiscal stimulus, an increasingly tight labor market, and core personal consumption as it plans to increase the Fed Funds rate three times this year. Many are planning for rates to be at or just under 3% by the end of 2018 and will likely rise to 3.5% by the end of 2019. The outlook appears solid for the economy and earnings, helping to support a continued appetite for risky assets even as worries about political tensions remain.
Assuming there are no geopolitical or macroeconomic crises, lending should not inhibit growth. With rising interest rates, the most pressing matter is between buyers and sellers; who will blink first?
taxable retail
Increased local resident and business spending in Nevada and Clark County continues to fuel rising taxable retail sales even though the rate of growth has been relatively flat since January 2016. We believe much of absolute growth in taxable sales is due to relatively healthy visitor spending numbers and strong construction activity. Another record high was reached in January when just under $3.47 billion in sales on a 12MMA occurred, a 3.4% rise from last year. This said, the YOY growth rate has trended down steadily from a recent high of 5% in May 2017. During the last 6 months, it has averaged 3.8%; the increase from the previous month was 0.33%.
January’s taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government revenues and spending. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the health of regional and national economies, which have driven Southern Nevada’s growth, benefiting all of its sectors. They are also primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region.
cc taxable sales
This month, we introduce a new chart into Stat Pack. It displays Clark 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 56% of taxable sales of the better known (“BK”) sectors and 53% of total sales. Compared to January 2017, Retail was up 2 percentage-points as a share of BK sectors. Accommodation & Food/Beverage was the second largest (29% of BK sectors and 28% of total sales) in January. Accommodation & Food/Beverage is down 1 point from January 2017’s 30% share of the BK sectors. Manufacturing came in at a distant 3rd place with only 4% of the BK set.
weekly earnings
The Las Vegas MSA’s 12MMA of average weekly earnings (not inflation-adjusted) was up by $2 in February. This growth trend, which began almost 3½ years ago in September 2014, continues. On a YOY basis, the 12MMA was up $30 (3.9%) from February 2017.
When looked at on an inflation-adjusted YOY basis, earnings rose by 1.8% in February 2018 compared to February 2017, reaching $668 (in 2007 dollars). However, when compared to January 2018, real earnings remained nearly the same, growing by just $0.26. Las Vegas’ average weekly real wage remains $83 (11%) below the most recent inflation-adjusted peak of $751 that occurred 10½ years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains much closer to the trough than the peak.
weekly hours
The number of average weekly hours worked in Las Vegas (Clark County), on a 12MMA basis, has been stuck at 33.9 over the past 3 months. Weekly hours have been climbing steadily, albeit slowly. This is the longest pause in growth since December 2016, which marked the last of 6 months with weekly hours stuck at 33.2. On a YOY basis, average weekly hours are up 0.6 hours from February 2017.
In Q4-2017, the U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.6 point drop, a bigger decline than in any of the previous 5 quarters. This suggests business reliance on part-time workers continues to decrease. The 7-year peak of 36.9 hours occurred more than nine years ago in October 2008.
Implication: Despite a decreasing U-6 unemployment rate, many companies continue to depend heavily on part-time workers and independent contractors. For this reason, Nevada’s U-6 rate remains the nation’s 3rd highest at 10.8% as of Q4, 2017. However, a dropping U-6 rate does seem to be benefiting weekly hours worked in 2017 as the chart shows. It remains to be seen if weekly hours can maintain their upward trajectory after this extended 3 month pause.
unleaded
Gas prices in Las Vegas have been climbing fast over the past month. As of April 2, Las Vegans saw the price of regular unleaded gasoline in the Las Vegas MSA increase by $0.24 (8.6%) from the prior month, resulting in a per gallon price of $3.01. The price of regular unleaded has gone up $0.38, or 14.3%, from a year ago. This is likely to have a dampening effect on other types of resident and business spending.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. Rising gas price could put a crimp on tourist spending in Las Vegas this summer.
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.”
emp permit
A well-known housing market indicator is the employment-to-housing permit ratio, or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. At 1.3 in February 2018, the E-P Ratio for Clark County has not changed over 3 months. Relative to February 2017, the E-P Ratio is down 0.5 points from 1.8.
The general consensus among real estate analysts is that an E-P Ratio between 1.0 and 2.0 indicates a stable market. Clark County’s E-P Ratio has been in this range for more than a year now, since October 2016.
pot
Nevada excise tax revenues generated from marijuana sales through the first 7 months are $34.9 million. 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 7 months indicate that the Department’s forecast is right on track. The major “know/unknown” is if the U.S. Justice Department goes through with its threats of curtailing or putting a halt to the industry’s activities around the country.

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.

Las Vegas Construction Jobs Still on the Rise

Presenting all the latest economic trends and metrics from Southern Nevada.
Of special note: Construction in the Las Vegas MSA continues to be boosted by a strong housing market and a recovering commercial market. In December 2017 the number of Southern Nevada construction workers rose by 8,358 (12-month moving average) from December 2016, a 15.1 percent increase that puts total construction jobs at 63,675. That makes 65 straight months (more than five years) of construction job growth.
Stat Pack co-publisher and RCG Economics Principal John Restrepo is happy to answer questions at jrestrepo@rcg1.com. 
stat highlights

positive

emp index
The RCG Employment Index’s 12-month moving average (“12MMA”) has now remained unchanged for 5 straight months, again holding at 98.7 through December. On a YOY basis, the Index is up 0.7 points from December 2016. After reaching 1.3 in June of this year, the YOY difference has fallen steadily as the Index remains stagnant. The Index is still 1.3 points below the November 2006 peak of 100.
job growth
The 12MMA of Clark County’s headline unemployment rate was 5.1% in December, making this the 5th month in a row that the rate remained unchanged. This is the longest streak seen since April 2011. The unemployment rate is 0.7 points below last December’s 5.8%. It reached its lowest level over 11 years ago in October 2006 when it was just 4%. Southern Nevada is now theoretically at “full employment.” We may be seeing the new normal in terms of unemployment post recovery.
The 12MMA rate of job growth in the Las Vegas MSA was also unchanged, holding at 3%. Job growth at the regional and national levels has been suffering from the same effect: According to the Brookings Institution, the slowdown is mainly due to decreasing demand for unskilled labor.
u3
The U-3 unemployment rate, or headline rate, for Nevada, after rising 0.2 points in Q3, fell back down by the same amount in Q4. The U-3 rate is now back to an even 5%, or 0.4 points above the average rate for 2007, the year the Great Recession hit. The U-6 rate had its biggest decline since Q3 2016, dropping 0.6 points from 11.4 to 10.8.
In terms of the U-3 rate, Nevada moved up a single place in Q4 and is now sharing the 8th highest headline rate in the nation with Ohio. In Q2 it was beating 13 other states. As for the U-6 rate, which measures underemployment, Nevada holds the 3rd highest rate in the country, beating only New Mexico and Alaska. Nevada businesses maintain a significant reliance on part-time workers.
yoy construction
Construction in the Las Vegas MSA continues to be boosted by a strong housing market AND a recovering commercial market. In December 2017 the number of Southern Nevada construction workers rose by 8,358 (12MMA) from December 2016, a 15.1% increase that puts total construction jobs at 63,675. That makes 65 straight months (over 5 years) and counting of construction job growth.
Construction jobs represent 7% of the region’s job-base, up 0.1 from last month. The number of construction jobs today is well below the November 2006 peak of 108,833, when they accounted for 11.4% of all MSA jobs. Pre-recession construction job numbers, which were artificially inflated due to the real estate bubble, are not likely to return in the foreseeable future. That said, the region’s construction industry is much more stable today than it was then.
visitor volume
In December 2017 the Las Vegas MSA’s 12-month visitor count, on an annualized basis, was 42.2 million. This is down from the 42.3 million over the 12-month period ending in November 2017. The number of visitors to Clark County fell in December for the 7th month in a row, this time by -0.2%. When compared to December 2016, there was -1.7% YOY growth. This is the 5th month in a row YOY visitation has declined.
After leading since the start of year and all the way through November, in December the final visitor count for 2017 fell behind that of 2016. There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. Visitor growth slowed considerably in 2017 with a YOY visitor growth rate average through December of -0.1%. The average rate of growth over 2016 was much better at 2.7%. We believe we have now entered a sustained period of slower growth. The month of greatest YOY growth since the recession was September 2011, when visitor volume grew by 4.5%. We believe that the primary reason for the slowdown is a room capacity issue.
convention
In December, Clark County’s annualized convention attendance saw a small gain from the previous month of 0.61%, reaching a new record high of 6.65 million attendees for the Las Vegas MSA over a 12-month period. Compared to December 2016, convention attendance is up 6.9%. The previous annualized peak attendance of 6.35 million was in January 2007.
Convention attendance saw significant gains in 2016 with 10 months of greater than 10% YOY growth; however, starting in October of 2016 YOY growth began to drop steadily until reaching a low in September 2017 of 1.1% YOY growth. The YOY growth rate popped back up the following month and has averaged 6.3% over the last 3 months of the year. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. The good news: In June 2017, the Las Vegas Convention and Visitors Authority’s Board of Directors gave final approval for an expansion and renovation of the Las Vegas Convention Center, which will allow the city to host more conventioneers.
hotel rev
In December 2017, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $114.59, a drop of $0.12 (-0.11%) from the previous month. Compared to December 2016, RevPAR is up $2.31 (2.1%), which continues its streak of YOY growth that began 7 years ago in December 2010. The RevPAR 12MMA had been nearing the peak of $119.43, which occurred in December 2007, but over the past 4 months it has been headed in the opposite direction.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev
On a 12MMA basis gaming revenue net of baccarat was up 0.51% to 735.7 million in December, a small pickup that more than made up for the tiny dips of the previous two months. YOY growth in December of 4% was up (1.0 point) from the 12-month period ending in November. This makes 35 months straight of positive YOY growth. December’s gaming revenues net of baccarat were nearly 88% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials under 35 have caused a decrease in slot revenues, they are now recovering because there has finally been some improvement with the issue of constrained disposable income.
home sales
According to Home Builders Research, in December, total (new and resales) Clark County home closings on a 12MMA were down -0.02% from the previous month, ending an 11 month streak of positive growth. Total sales fell below last month’s peak of 4,933 by 1. However, on a YOY basis total home sales are still well above the previous year by 8.6%, an improvement over the year period ending in November of 0.7 points. New home sales had a YOY growth rate of 16.9% in December. Existing home sales also continue growing steadily with a YOY growth rate of 7.1%; not as rapidly as new homes but healthy growth, nonetheless.
home price
Per Home Builders Research, December’s 12MMA median home price (new and resale) was $244,453, a 1.31% gain over the previous month. This was the biggest monthly increase of the year. Compared to December 2016, the price is up 11%. The current median home price remains well below the peak of $305,333, which was recorded close to 11 years ago in February 2007. December’s estimate is 80% of the peak price.
The median new home price was again up 6.3% from the previous year, reaching a new peak in December of $343,588. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $225,900 in December, an 11.4% increase during the last 12 months. This was the biggest YOY increase since October 2014. The peak of $286,833 occurred over 10 ½ years ago in April 2007. This means that the current resale price has now recovered approximately 79% of its pre-recession peak. For comparison, the median resale home price in the Reno-Sparks MSA was over $100,000 higher at $336,901 (12MMA).
The rate of home appreciation for new and resale homes continued its rising trend in December. YOY growth had dropped to 6.4% in December 2016 but has risen steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months. The annual peak of 35.8% growth occurred in February 2005.
30 yr fixed
The 12MMA 30-year fixed rate mortgage in the Western Region was nearly unchanged, falling by just 0.01 points to 3.98% (12MMA) in January. This was the 2nd dip in a row after 12 straight months of increases. The 10-year peak of 6.4% occurred in October 2006. The 30-year fixed rate mortgage should remain relatively low, but will likely go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 161.3 in November 2017, a rise of 7.6% compared to November 2016. The YOY growth rate has been picking up steadily since March of this year and in November the trend continues with the rate rising by 0.3 points from the previous month. The US index in November was up 1.0 again, reaching 198.9, an increase of 5.9% for it compared to the previous year. The Las Vegas index peaked at 233.2 in December 2006. The latest LV index is 69% of the peak. Both indexes have been on the rise since 2012. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
commercial mtg
The 30-Day LIBOR remained relatively unchanged in January while the 10-year U.S. Treasury rose a whopping 32 basis points during the same period. Yields are believed to be rising due in part to an improving labor market, rising corporate profits, and an overall expansion in economic activity. In Janet Yellen’s final meeting as chair, a unanimous vote by the Federal Open Market Committee (FOMC) left its benchmark interest rate unchanged at a current range of 1.25% to 1.50%. The FOMC is expected to raise rates during the next meeting in March.
While interest rates continue to adjust upward, long-term fixed-rate loans have remained relatively low in the 3.75-4.85% range. Markets for the major loan segments remain quite liquid, creating flexible terms for borrowers.
taxable retail
Increased local resident and business spending in Nevada and Clark County continues to fuel rising taxable retail sales despite a declining visitor growth rate. We believe much of this growth is due to the volume of construction activity combined with vigorous visitor spending. Another record high was reached in November with over $3.45 billion in sales, a 3.8% increase from last year. The increase from the previous month was 0.27%. The YOY growth rate for taxable retail sales averages 4.2% through November.
November’s taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government revenues and spending. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the health of regional and national economies, which have driven Southern Nevada’s growth, benefiting all of its sectors. They are also primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region.
Note: The Nevada Department of Taxation has recently made public its marijuana tax revenue data. We have added a new chart to the Stat Pack tracking the monthly contribution of this new revenue source, to the extent it is reported by the Department
weekly earnings

The Las Vegas MSA’s 12MMA of average weekly earnings (not inflation-adjusted) was up by just $1 in December after 4 straight months of $3 increases. The streak of growth started just over 3 years ago in September 2014 continues, nonetheless. On a YOY basis, the 12MMA was up $35 (4.6%) from December 2016.
When considered on an inflation-adjusted, YOY basis, earnings rose by 2.5% in December 2017 compared to December 2016, reaching $668 (in 2007 dollars). However, when compared to the previous month real earnings remained nearly the same, falling by just $0.13. Las Vegas’ average weekly real wage remains $83 (11%) below the most recent inflation-adjusted peak of $751 that occurred over 10 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains much closer to the trough than the peak.
weekly hours

The number of average weekly hours worked in Las Vegas (Clark County), on a 12MMA basis, picked up another 0.1 points in December, reaching 33.9. Weekly hours have been climbing steadily, albeit slowly. On a YOY basis, average weekly hours are up 0.7 hours from December 2016, a good sign considering they were either down or unchanged YOY through all of 2016. In Q4-2017, the U-6 unemployment rate recorded a 0.6 point drop, a bigger decline than in any of the previous 5 quarters. This suggests business reliance on part-time workers continues to decrease. The 7-year peak of 36.9 hours occurred more than nine years ago in October 2008.
Implication: Despite a decreasing U-6 unemployment rate, many companies continue to depend heavily on part-time workers and independent contractors. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers) remains the nation’s 3rd highest at 10.8% as of Q4, 2017. However, the decreasing U-6 rate does seem to be having a salutary effect on weekly hours. In 2016, the net gain in weekly hours was 0. Already in 2017 weekly hours have increased 0.7 hours.
unleaded
As of February 2, Las Vegans saw the price of regular unleaded gasoline in the Las Vegas MSA increase by $0.11 (3.9%) from the month prior, resulting in a per gallon price of $2.72. The price of regular unleaded has gone up $0.29, or 11.8%, from a year ago.
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.”
emp permit
A well-known housing market indicator is the employment-to-housing permit ratio, or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. At 1.6 in December, the E-P Ratio for Clark County was unchanged from the previous month. Relative to December 2016, the E-P Ratio is up 0.2 points from 1.4. The general consensus among real estate analysts is that an E-P Ratio between 1.0 and 2.0 indicates a stable market. Clark County’s E-P Ratio has been in this range for more than a year now, since October 2016.
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.