1. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Labor Market Briefing: July 2013 Department of Employment, Training & Rehabilitation Frank R. Woodbeck, Director Bill Anderson, Chief Economist Leanndra Copeland, Supervising Economist Prepared by the Research and Analysis Bureau for Presentation to SNAPPE: September 2013

2. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency National Perspective

3. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Key U.S. Economic Indicators  Readings of consumer sentiment and confidence remain volatile from month-to-month, but appear to be trending up over time and stand at or near post-recession highs.  Housing starts in July, at 0.9M (SAAR 1 ), were up 5.9% from the previous month, and 20.9% from a year ago.  Consumer prices up two percent relative to a year ago in July.  Real GDP up 2.5% in 2013:IIQ, with personal consumption expenditures up by 1.8%.  Industrial production rose 1.4% relative to a year ago in July. 1 seasonally adjusted annual rate

4. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency U.S. Real GDP Growth (quarter-over- quarter; SAAR)  The nation’s economy grew 2.5% in 2013:IIQ, up from a 1.1% gain in the previous quarter. Growth in consumption expenditures came in at 1.8%, compared to a 2.3% gain in 2013:IQ.  Residential and nonresidential fixed investment, exports, and private inventory investment, also made positive contributions, offsetting negative contributions from federal/state/local government spending and imports.  Comprehensive revisions to historical GDP estimates did little to change the overall assessment of a modest recovery. Over the 2009-2012 period, average annual growth was revised up by 0.3 point, to 2.4%.

5. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency U.S. Unemployment Rate (SA)  The jobless rate peaked at ten percent in October 2009.  In July, it stands at 7.4%, down 0.2 point from June, and 0.8 point from a year ago.

6. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency U.S. Job Growth (month-over-month; SA)  8.7 million jobs lost 12/07-12/09.  Since then, 6.7M jobs (about 77% of those lost) have been added.  Job growth totaled 162K in July.

7. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Labor Market Conditions

8. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency NV vs. the U.S. Unemployment Rate (SA)  Nevada’s unemployment rate stands at 9.5% in July, down from 9.6% in June and 11.2% a year ago. The rate has been trending in a very narrow range so far this year.  Off from a record high of 14% recorded in October 2010.  The State’s jobless rate stands 2.1 percentage points higher than the nation’s 7.4%, but has narrowed the gap considerably during the post-recessionary period.

9. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada’s Recession Scorecard: Unemployment Rate  Despite the fact that it is trending down, Nevada’s jobless rate is 4.3 percentage points higher than at the “official” start of the recession in December 2007.  The U.S. unemployment rate stands 2.4 points higher than at the start of the recession.

10. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency County Unemployment Rates (YTD, NSA)  The highest unemployment rates are in Lyon and Mineral Counties, with Esmeralda, Lander, and Humboldt having the lowest.

11. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nonfarm Jobs in Nevada (SA)  In totaling 1.15 million, job readings are up by 15,300 relative to a year ago, but down by 10,200 over-the-month.  Between 2007 and 2010, job losses totaled more than 175,000.

12. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Job Growth (SA; year-over-year)  Nevada job readings are up 1.3% from a year ago. Growth does appear to have eased a bit as the year has unfolded.  This increase marks the 31 st straight month in which year-over-year gains have been recorded.  In mid-2009, job losses exceeded ten percent on a year-over-year basis.

13. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Job Growth: NV vs. the U.S. (year-over-year; NSA)  After growing at a much faster pace than the U.S. prior to the recession, Nevada job losses were more pronounced than in the nation during the downturn. Only within the past several months has job growth in the State, once again, exceeded national norms. However, in the month of July, the reverse is true…a trend which we will continue to monitor going forward.  Through July, jobs are up two percent relative to the same period in 2012 in Nevada, compared to a 1.6% increase in the U.S. as a whole.

14. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada’s Recession Scorecard: Non-Farm Jobs (SA)  Nevada’s job losses since the “official” start of the recession in December 2007 total 139K (-10.7%).  Over the same period, U.S. jobs are down 1.5%.  400K jobs were created in Nevada between 1997 and 2007.

15. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Job Growth by Industry (YTD; year-over-year; NSA)  Leisure/hospitality leads the way with 6,800 more jobs so far in 2013 vs. a year ago.  TTU has added 4,900 jobs over the same period, while construction is up by 1,900.  PBS job levels declined by 1,000 positions so far in 2013.

16. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Metro Area Job Growth (year-over-year; year- to-date; NSA)  Las Vegas added 18K jobs relative to a year ago during the first seven months of 2013.  In Reno, job levels are up 1,300, while Carson City is off just slightly from year-ago readings.

17. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Initial Claims for Unemployment Insurance  Initial claims totaled 17,800 in July. This compares to 18,700 a year ago. Declines have been recorded in 41 of the past 44 months.  Claims activity during the recession peaked in excess of 36,000.

18. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Total Unemployment Insurance Claims vs. the Total Number of Unemployed  There were 52,400 Nevadans submitting UI claims in July, up by 400 from the prior month. Compared to a year ago, the number of claimants was down 13,200.  32,100 were regular UI claims; 20,300 fell under a variety of extension programs.  Of the 130,400 Nevadans estimated to be unemployed in July, 40 percent were receiving benefits. In the first half of 2008, 42% of those counted as unemployed received benefits. At its peak, the “coverage ratio” exceeded 70%.

19. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Miscellaneous Special Topics

20. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Personal Income Growth (year- over-year)  Personal income gains have rebounded off of recessionary lows.  Like other indicators, income trends suggest that the economy bottomed out over the 2009-2010 period.  In 2013:IQ, personal income is up 2.3% from a year ago.  Growth, however, remains below the national average (+2.8% in 2013:IQ), but the gap is narrowing.

21. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Average Weekly Wage Growth (year-over-year; 2013 YTD through IQ)  Following two years of outright declines during the recession, AWW have been on the rise since 2011.  There was some weakness in this year’s first quarter, a trend which we will be monitoring.  So far this year, wages have averaged $844 per week.

22. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Jobs Regained as a Percent of those Lost Since Prior Peak  The employment recovery differs across regions. Nevada has added back about one- fourth of the jobs lost during the recession. In the entire Mountain Division, about 55% of jobs have been added back.  Only the West South Central Census Division exceeds it’s previous peak employment.

23. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency The National Labor Market: Labor Force Flows  An analysis of the month-to-month flows in the labor force highlights some interesting trends.  As the recovery has unfolded, more people are entering the labor force and finding employment.  At the same time, fewer individuals are entering the labor force in any given month and counted amongst the unemployed.

24. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Gold Prices (per ounce)  Although still relatively high in historical terms, gold prices have declined sharply off of peak readings.  At $1,349 in August, prices are off by $400 from historical highs.  Mining jobs are up 6.4% from a year ago in July.

25. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Value of Nevada Exports (millions of $)  Export activity has surged, especially over the course of the past two years.  The value of exports has essentially doubled from pre-recessionary readings.  Declining of late, probably related to price of gold..

26. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Alternative Measures of Labor Underutilization (four quarters ending in 2013:IIQ)  U-3 similar in scope to the official rate.  U-4 adds discouraged workers to U-3. Discouraged workers are those people who would like to work, but have stopped looking for work because they believe there are no jobs to be filled. This adds less than one percentage point to the U-3 rate.  Marginally attached workers, the addition to U-5, have not searched for work for reasons other than belief that there are no jobs to fill.  Finally, U-6 adds part-time workers (working less than 35 hours per week) who would rather be working full-time, but  cannot due to economic reasons, including having their hours cut or being unable to find full-time work.

27. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Discouraged Workers in Nevada  Much attention is paid to the impacts of workers dropping out of the labor force and giving up their searches for work, so-called “discouraged workers.”  Over the past 12 months, there have been, on average, 13,200 discouraged workers in Nevada, less than one percent of the labor force.  At it’s recessionary peak, discouraged workers approached 18,000.

28. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Full-Time vs. Part-Time Employment in Nevada (12-month moving average)  Information from the Current Population Survey suggests that much of the growth in employment of late has been full-time.  In the 12 months ending in May, there were 113K more Nevadans with full-time employment than at the low point in early-2011.  Part-time employment amongst Nevadans has held relatively steady since the end of the recession. P

29. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Unemployed Nevadans Classified as “Job Losers” (12-month moving average)  Individuals can be unemployed for a variety of reasons…job losers, job leavers, and entry/re-entry into the labor force.  Information from the Current Population Survey suggests that the number of job losers in Nevada (separated involuntarily from their job) is on a noticeable decline.  At the height of the recession, the number of job losers peaked at nearly 120K. Over the past 12 months, there has been, on average, a bit under 67K.

30. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Unemployment Rate by Educational Attainment (12-month average through May)  Within Nevada (and elsewhere), unemployment rates decline with the level of education.  Over the past 12 months, the jobless rate for those with less than a high school diploma has averaged 16%. For those with at least a Bachelor’s degree, it has been just 5.3%.

31. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Current Employment Statistics Job Trends Since 2010  CES data provide job estimates derived from a BLS business survey. They are subject to revision and are benchmarked annually to reflect trends from the Quarterly Census of Employment and Wages Program, which provides “ complete count, ” but less timely, job readings.  Since the recovery began, 10,700 private sector jobs were added in 2011, followed by an additional 19,400 jobs in 2012.  Through the first seven months of this year jobs are trending 19,700 higher than a year ago. Assuming these gains hold in the final five months of the year, Nevada is on pace to have added 49,800 jobs over the 2010-2013 period.  While the monthly changes in the CES information are volatile, we are more comfortable with the year-to-date results, as the monthly “ noise ” is minimized. We are also confident with the accuracy of the YTD gain of nearly 20K through this year ’ s first seven months in that 2013:IQ complete count QCEW results show a similar year-over-year gain of 22,100.

32. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Assessing the Accuracy of Private Sector Job Estimates: Some Preliminary Findings (year-over- year growth in CES and QCEW job readings)  Current Employment Statistics = monthly estimates; Quarterly Census of Employment and Wages = actual job count from UI records (less timely).  Estimates of job growth in December/January appear to have been a bit too high.  In aggregate terms, CES estimates so far this year show job gains, as a whole, consistent with QCEW trends.

33. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Average Monthly Earnings: All Workers vs. New Hires  In examining wages and earnings, the focus is often on some measure of average earnings.  It is important to note that wages for new hires tend to be below the average.  Specifically, new hire earnings (measured on a monthly basis) tend to be about two-thirds of the overall average.  In mid-2012 (the most recent information available), average earnings totaled $3,620 per month. New hire wages came in at $2,540.

34. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Teen “New Hires” (14-18 year olds; IIIQ)  This information utilizes UI wage records through the Census Bureau’s Local Employment Dynamics Program. It does not capture employment not covered by UI.  Third quarter hiring is typically several thousand higher than at other times of the year.  New hires declined sharply through 2012 and have settled at just less than 15K, compared to pre-recessionary readings which were approaching 40K.

35. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency A Structural Analysis of Nevada’s Economic Development Sectors  Location quotients are a measure of relative economic concentration in a region and represent the ratio of a sector’s employment share in Nevada to that for the nation as a whole.  The employment share of Nevada’s largest sector, TGE, is nearly 2.6 times greater than that for the U.S. as a whole. Much the same is true for mining.  A similar analysis shows that the HMS sector in Nevada is only about two-thirds the relative size in the national economy. Both the clean energy and logistics/operations sectors have LQs of about 0.8.

36. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Average Annual Wage by Sector  The Statewide average is $43,800.  Of the eight sectors, seven have above-average wages.  The highest wages are in mining/materials and A-D. The lowest are in TGE.

37. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Female Share of the Workforce by Economic Development Sector  Three-quarters of the healthcare/medical services workforce is made up of women. TGE also has a fairly high share, at 48%.  Not surprisingly, the lowest share of female employment is found in such sectors as mining/materials, clean energy, and manufacturing.  In total, women make up about 48% of Nevada ’ s workforce.

38. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Business Employment Dynamics: Private Sector Gross Job Gains vs. Gross Job Losses (SA)  Considerable churn beneath the surface of the labor market.  4,100 net new jobs in 2012:IVQ.  60,100 gross gains at opening/expanding establishments; 55,900 gross losses at closing/contracting establishments.  Net positive growth for nine consecutive quarters.

39. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada Job Growth in Establishments with Less than 100 Employees (year-over-year)  Job gains have been recorded in each of the past eight quarters (through 2012:IVQ, the latest available).  In the final three months of last year, 14,500 jobs were added in small businesses, and the trend appears to be strengthening. All told, establishments with less than 100 employees are home to over 535,000 jobs.  While certainly an improvement over the losses recorded during the downturn, gains are well short of pre-recessionary results.

40. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Initial Claims: A Historical Perspective (52- week moving average)  Given historical population/economic growth in the State, we would have expected initial claims to rise over time.  Despite the cyclical volatility in claims activity, current levels are very consistent with the historical trend.

41. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Number of States with a Lower Private Sector Job Growth Rate than Nevada  In the years preceding the recession, Nevada led the nation in employment growth (based upon QCEW information).  Nevada was impacted by the recession more than any other state in terms of employment growth.  In 2011 and 2012, Nevada ’ s employment growth rate is rising again. Private sector jobs grew 1.9% last year, higher than that for 25 other states.

42. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Number of States with Lower GDP Growth than Nevada  Prior to the recession, Nevada was consistently amongst the leaders in terms of overall economic growth, as measured by GDP.  As the recession unfolded, nearly every other state held up better than Nevada.  As the recovery has unfolded, Nevada has begun to make up lost ground. In both 2011 and 2012, Nevada’s GDP growth outpaced that for approximately 20-25 other states. 2012 GDP growth was 1.5%.

43. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada ’ s Unemployment Rate Forecast  The jobless rate peaked at 13.8% in 2010; 11.1% in 2012.  We expect a modest downtrend over the next several years.  9.4% in 2013 (9.9% YTD).  8.5% in 2014 and 8.1% in 2015.

44. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency Nevada ’ s Employment Forecast  Job losses peaked at 115,000 in 2009; losses eased to a decline of 31,000 in 2010.  2011 saw a return to positive growth (+7,000), with an additional 17,000 jobs in 2012.  We expect an additional 23,000 jobs in 2013, 30,000 in 2014, and 33,000 in 2015.  Current (2012:IIIQ) level = 1.13M; 2015:IVQ projection = 1.24M

45. The Nevada Department of Employment, Training and Rehabilitation is a proactive workforce & rehabilitation agency For Additional Information, Please Contact: Nevada Department of Employment, Training and Rehabilitation Research and Analysis Bureau Bill Anderson Chief Economist wdanderson@nvdetr.org Leanndra Copeland Supervising Economist L-copeland@nvdetr.org (775) 684-0450 http://www.nevadaworkforce.com follow us on Twitter @nvlabormarket