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The U.S. recession may be over, but Las Vegas employers are still cutting jobs and will continue to do so despite signs of national economic growth, experts said.
Las Vegas lost 60,400 jobs since August 2008, according to August statistics, the most recent figures available from the state’s Employment Department. The statewide unemployment rate is 13.2 percent, and the Las Vegas rate is 13.4 percent, both records.
The dismal local employment picture persists despite an improving national economic outlook. A survey of 44 economists by the National Association for Business Economics released Oct. 12 said “the Great Recession is over.”
But despite gains in the gross domestic product, corporate profits and business investments, more than half the economists surveyed said job losses are not expected to be “fully reversed” until 2012. A third said job losses wouldn’t be reversed until 2013, and 5 percent said it would take even longer. Only three economists think the jobless rate will return to precession levels before 2012.
The unemployment rate is generally considered a lagging economic indicator.
Companies first have to assess whether their business levels are coming back, said Arte Nathan, a human resources expert and owner of Strategic Development Worldwide.
“People have used the mantra of doing more with less for the past year and are going to do more with less,” Nathan said.
As business levels increase, employers will decide whether they need to add more workers, he said.
In industries such as tourism and hospitality, core components of Las Vegas’ economy, Nathan said the recession “has shaken the confidence of everybody.”
Employers will be “conservative and cautious as long as they have to be,” he added.
But to look at job creation on a global, national or even local level can be tricky. Adding to a workforce is an individual decision and not even tax incentives or government subsidies can be counted on to move employers to hire, he said.
Although some economic indicators are showing improvement, that doesn’t mean growth will be felt on Main Street, said economist John Restrepo, principal of Restrepo Consulting Group.
“Because of financially battered consumers constraining spending, additional job losses — locally and nationally — are likely in the months to come,” Restrepo said by e-mail. “It’s our view that businesses will continue to reduce payrolls because of dormant consumer demand for products and services into 2010. This means that our local recovery will be a tepid one.”
Then there is the possibility of what economists term a W-shaped recovery, Restrepo said. Instead of the recession bottoming out and returning to strong economic growth — a V-shaped recovery — the growth would be short-lived, with another drop before a strong recovery.
Even though job losses outpace new hires in Southern Nevada, some companies have expanded during the recession. Kohl’s, taking advantage of clothing retailer Mervyn’s failure and abandoned retail space, opened three stores last month in Las Vegas, hiring 450 people. CityCenter, nearing completion, is filling 12,000 positions, although many workers are transfers from other MGM Mirage properties,
Business growth will depend on people opening their wallets, but consumers and businesses will be more focused on rebuilding savings accounts and balance sheets than on discretionary spending, Restrepo said.
The state isn’t optimistic companies will slow layoffs, either.
The Employment Department extended its unemployment claims filing hours for two Saturdays this month to accommodate the demand.
“Signs of stabilization in the national economy are beginning to emerge,” Bill Anderson, the department’s chief economist, said last month. “Some analysts even argue that the recession is likely over, or will be over in the near term. However, such positive conclusions cannot be drawn in Nevada, based upon a current assessment of labor market and economic activity in the state.”
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