The drop of one-tenth of a percentage point in the seasonally adjusted rate from April is the ninth consecutive month that the rate has shown improvement, said DETR Chief Economist Bill Anderson.
While an improvement, Anderson again noted in the May report that part of the drop is due to people giving up looking for work.
“Nevada is experiencing some welcomed improvement in the jobless outlook, but it’s important to note that the decline is partly due to the diminishing labor force,” he said. “Fewer people are looking for work as they continue to find it difficult to obtain employment in the current market. Nevertheless, trends do indicate that Nevada’s labor market is slowly rebounding.”
Gov. Brian Sandoval acknowledged that Nevada’s unemployment rate remains significantly high, with 158,300 Nevadans who are currently unemployed, but said he is optimistic about improvement in the job market.
“I am encouraged by this month’s jobs report,” Sandoval said. “With another month of positive news, we are beginning to see several sectors of our economy grow. While these are strong signs, we must continue to help our economy strengthen by cultivating new businesses and expanding those already here.”
While not directly comparable to the state’s seasonally adjusted figure, the unemployment rate in each of the state’s three metropolitan areas held relatively steady, in May, Anderson said. Las Vegas has the highest jobless rate amongst the state’s three population centers, at 11.8 percent, with Carson City’s rate slightly lower at 11.7 and Reno at 11.5 percent.
Seven counties, all of them rural, have single-digit unemployment rates on a year-to-date basis, with the lowest rates in Lander, Eureka, and Esmeralda. Lyon (16.3 percent so far this year) and Nye (14.9 percent) have the highest jobless rates.
Statewide April job estimates have been revised upward by 700, and a seasonally adjusted 5,900 jobs were added to payrolls in May, the second-strongest month-to-month gain this year. At a seasonally adjusted 1.14 million, job readings stand at their second-highest level in nearly three years and are up 12,700 from a year ago, Anderson said.
Nearly all industries in Nevada reported positive results in May, but year-to-date results helps to shed light on underlying trends, Anderson said. Through the first five months of 2012, nonfarm job levels in Nevada stand 9,000 higher than a year ago.
As for some of the state’s major industries, leisure/hospitality has added 10,000 payroll jobs so far this year. Recent trends in the trade/transportation/utilities industries have been fairly strong, leaving job levels in the first five months of the year up by 2,300 compared to 2011.
Professional/business services establishments have added 1,800 jobs over the same period. Mining-related jobs have averaged 15,500 so far this year, up by 2,300 (or 17.4 percent) from 2011. Strong underlying fundamentals in this industry have certainly contributed to the relatively low unemployment rates in several of the state’s rural counties.
DETR Director Frank R. Woodbeck said that with the unemployment rate improving, the agency will continue to support Sandoval’s efforts to attract new businesses and build a workforce to support the state’s improving economy.
“We are working diligently to further develop Nevada’s workforce system through strengthened partnerships with the business community and greater alignment with higher education, Woodbeck said. “We are exploring every opportunity to continue preparing individuals for careers that will be in higher demand as employers gain confidence to add more jobs and see the benefits of locating operations in Nevada.”
The slowing improving jobs market in Nevada comes as the state is preparing to pay more than $22 million at the end of the month to the federal government as an interest payment on money borrowed to pay unemployment claims. The state has borrowed nearly $700 million from the federal government to date to pay benefits.
Another interest payment of $40 million, which is coming out of the state’s general fund, will be due next fiscal year. The borrowing was made necessary because the unemployment tax rate charged to Nevada’s employers has been inadequate to cover unemployment benefits.
The loan is not expected to be paid off until 2018.
DETR Chief Economist Bill Anderson says the May report is fairly encouraging:
Anderson says the rate of improvement in the labor markets will continue to be modest, however: