The growth rate of the U.s. economy slowed down sharply from fourth quarter 2010 to first quarter 2011. After that, U.S. economic growth accelerated for the next two quarters. A variety of monthly measures - including strong spending and increased manufacturing output - suggest that the growth rate of real GDP will prove to have been quite strong during fourth quarter 2011.
During the most recent recession, U.S. employment fell by 7.490 million jobs (5.4 percent). During the first 8 months of the recovery, U.S. employment declined another 1.247 million jobs, which reduced employment to 6.3 percent below the prerecession peak. Since hitting bottom in February 2010, U.S. employment has risen by only 2.270 million jobs.
As of September 2011, U.S. employment stands 4.7 percent below its prerecession peak. If we peek under the hood and look at job destruction and creation and firm size, we see a substantial change in U.S. businesses.
As of September 2011, Las Vegas saw 19 consecutive months of increased tourism, and Las Vegas visitor volume has finally returned close to the levels seen in 2007, before the recession. Las Vegas tourism is changing as it recovers. Visitors are coming from farther away, staying longer and paying higher hotel rates than in recent years. Visitors also seem to be gambling less and purchasing less from the retail shops in the casinos.
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The most recent recession was the deepest of any since World War II. During the 2007 - 2009 recenssion, U.S. real GDP fell 5.1 percent from peak to trough. The average peak to trough decline in real GDP during the ten previous recessions was 1.7 percent.
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In late July, the Bureau of Economic Analysis released revised GDP figures. The new data tell us that the most recent U.S. recession was deeper and the ensuing recovery was much weaker than we previously thought. Moreover, first and second quarter 2011 showed the weakest economic growth since the official end of the recession in June 2009. The tepid recovery raises a concern that the U.S. economy could dip back in to a recession.
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In recent months, we have heard quite a bit about the importance of reducing the U.S. government’s budget deficit and about the necessity of raising the debt ceiling. These two ideas are related because a budgetary deficit means that government spending is more than revenues, and the government must borrow the difference. As long as the federal government runs a deficit, its indebtedness continues to grow. Because the federal government has set a ceiling on the amount of debt it allows itself to have, it is occasionally forced to raise the ceiling to accommodate its accumulating debt. Such an occasion gives us a time to pause and consider the directions of government spending, revenues and the rate at which the U.S. government debt is accumulating.
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The U.S. economy seems to be facing a troubling mix of rising prices and weakening growth. The consumer price index (CPI) has risen considerably over the past six months, showing an annualized gain of 5.2 percent from November through May. Much of the gains have been the result of rising food and energy prices. Nonetheless, Core CPI (which excludes the volatile food and energy components) is also showing signs or rising, with an annualized gain of 2.1 percent from November through May.
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As economic activity in Nevada's neighboring western states improves - particularly in populous California - Nevada will see increased tourism, hospitality and gaming activity. In 2010, Nevada gaming revenue increased by only 0.1 percent. According to the Western Blue Chip Economic Forecast, a survey of experts by the W.P. Carey School of Business at Arizona State University, Nevada gaming revenue will increase by 3.1 and 3.0 percent in 2011 and 2012, respectively.
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In early 2011, the U.S. economy finally began to show a decent rate of employment growth, with a gain of nearly 480,000 nonfarm jobs in the first quarter. As the economy nears its second year of recoery and expansion, however, the headwinds to economic growth seem to be increasing.
Oil prices have risen substantially in the past year, and U.S. fincal policy is set to become less expansionary. Perhaps surprisingly, financial problems have become much less of an obstacle to growth. Monetary policy remains quite accommodative to economic expansion but is moslty ineffective.
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The U.S. Census and data from the Las Vegas Multiple Listing Service (MLS) and the Center for Business and Economic Research (CBER) at the University of Nevada offer very different persepectives on the Las Vegas housing market.
According to the U.S. Census, the Las Vegas metropolitan area had 840,343 housing units, 715,365 were occupied and 124,978 (14.87%) were vacant when the census was conducted in April 2010. According to the Las Vegas MLS and CBER, the Las Vegas metropolitan area has 767,580 housing units in 2010, 735,530 were occupied and 32,050 (4.18%) were vacant in the fourth quarter.
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