Jobless figure tops U.S. rate

Nevada’s seasonally adjusted unemployment rate rose two-tenths of a percentage point from April’s 4.4 percent rate, according to the Department of Employment, Training & Rehabilitation.

The estimated rate for the Las Vegas area declined from April to May by one-tenth of a percentage point to 4.2 percent, according to the report. But the local figure is not adjusted for seasonal variations in unemployment.

The statewide increase has occurred as Nevada’s record job creation rate has slowed. The job growth rate a year ago for Nevada was 5.2 percent. It has now dropped to 2.2 percent for the past 12 months, which is the lowest it’s been since October 2002.

“We are definitely experiencing a narrowing of the gap between the state and the rest of the nation in job growth and unemployment,” said department Director Terry Johnson.

The state continues to add jobs, just at a slower rate, he said. The state added more than 3,000 jobs in May.

From 2003 to 2005, Nevada ranked first in job growth in the nation, now it ranks about sixth, Johnson said. A combination of factors is contributing to a higher unemployment rate and the slowing of job growth, he said.

“People are continuing to move to Nevada at a tremendous pace, but unfortunately the labor market has not been able to absorb that growth as quickly as in the past,” Johnson said. “This is why we can continue to register a fair amount of job growth, but continue to see a rise in the unemployment rate.”

Johnson said the housing slump is one of the leading causes of the rising unemployment rate. The continuing decline in the sale of new and existing homes has put a crimp in Nevada’s economic health for the past several months, he said.

From 2003 to 2006, employers added nearly 50,000 residential and commercial construction jobs to the economy. The state has lost about 6,000 of those jobs since last summer. During the construction boom, Nevada added about 1,300 construction jobs per month, Johnson said.

Construction industry employment is nearly 3 percent lower statewide than a year ago, he said. Additionally, the closure of the Stardust and pending closure of the New Frontier have contributed to a loss of jobs in the gaming industry. Also, no large new properties have opened since Red Rock Resort in April 2006.

The department has seen a 25-percent increase in the number of unemployment insurance claims by construction-related workers in the past year. This industry includes all occupations ranging from construction office workers to carpenters.

Additionally, there has been a 58 percent increase in the number of claims by food prep and service workers over the year, which includes the time since the passing of Ballot Questions 5 and 6, raising minimum wage and banning smoking.

“Since our last report in March, the rate of increase of claims from the food service sector has climbed by another 7 percent,” Johnson said. “It appears that there could be a link between the smoking ban and the number of workers at restaurants and bars losing their jobs.”

Another factor contributing to the rise in unemployment includes other business closures, such as Merrillat Industries and HCA Billing Center in Las Vegas.

“Nevada is near the low point of its business cycle,” Johnson said. “Following the opening of The Mirage resort nearly 20 years ago, Las Vegas saw a wave of casino openings about every three years, sustaining a high rate of growth for most of the 1990s.”

In the past seven years, Wynn Las Vegas is the only megaresort to open. There were some smaller hotel-casinos to open in the same time period.

“The good news is, there are major projects on the horizon that will bring a much-needed boost to Nevada’s labor market,” Johnson said. “New gaming properties will add tens of thousands of workers and growth in tourism will generate new jobs in such industries as slot machine manufacturing, linen services, uniform supply and more.”