More Bad Economic News For Nevada

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CARSON CITY, Nev. (AP) - Nevada officials worried about a state
revenue shortfall that could hit $800 million by mid-2009 got more bad economic news on Friday - reports showing a continuing slump in
sales and higher-than-average unemployment.

The state's merchants reported January sales of $3.52 billion, down 4.9 percent from the same month a year earlier. The statewide jobless rate held steady at 5.5 percent in February, compared with a national rate of 4.8 percent.

The state Taxation Department said sales were down in January in
10 of Nevada's 17 counties. That included its largest, Clark,
encompassing Las Vegas, and Washoe, which takes in Reno.

The new report shows the state's cut of sales taxes is now $61 million, or 5.7 percent, below forecasts for the current fiscal year. It follows a recent Gaming Control Board report that the state's taxes on casino winnings are $48.2 million, or 8.5 percent, below forecasts for the same period.

Taxes on the casinos and on sales are the two largest revenue
sources for state government. The slump in those revenues has been
a key part of the analysis leading to the overall state revenue shortfall that Gov. Jim Gibbons plans to talk about on Monday.

Gibbons already has ordered 4.5 percent budget cuts for most state agencies, and the growing revenue shortfall projection is likely to force him to order more cuts. He's opposed to calling a special legislative session to consider new or higher taxes to generate more revenue.

"The January economic numbers show that Nevada's economy is
experiencing many of the same challenges that are being seen in many other states," Gibbons stated Friday. "Clearly the drop in consumer spending is having an adverse effect as well as the nationwide housing problem, which is particularly acute in Nevada."

A breakdown of the sales for January shows that Clark County, with $2.67 billion of the sales, was down 4.2 percent while Washoe, with $472,787 of the sales, was down 7.2 percent.

The Taxation Department report shows that the single biggest category, restaurant-bar sales, was down 3.2 percent at $578.7 million statewide. Such sales are indicators of tourist traffic in this tourist-dependent state.

Automobile and auto parts sales totaled $404.9 million, down 11.5 percent. General merchandise sales of $545.9 million were down 3 percent; while clothing sales, totaling $418.2 million, were up 9.6 percent.

The Taxation Department report also shows various excise taxes
amounted to $14.5 million in January. That's a decrease of 7.3 percent.

The February unemployment report from the Department of Employment, Training and Rehabilitation shows, besides the seasonally adjusted 5.5 percent jobless rate, that about 78,800 Nevadans were out of work during the month while nearly 1.3 million people held jobs.

Bill Anderson, chief economist for the agency, described the state's economic outlook as "challenging in the near term." Anderson added that with most of the new Las Vegas megaresort construction due for completion in 2009 and later, "the Nevada economy may do well to hold steady in 2008."

For the Las Vegas area, non-seasonally adjusted unemployment
decreased from 5.7 percent to 5.4 percent between January and
February. There were about 930,500 people working in the area and
the jobless total was 53,500.

The Reno area saw non-seasonally adjusted unemployment decrease
from 6.6 percent to 6.3 percent in the same period. Employment totaled 217,800, and about 14,600 people were out of work.

Carson City-area unemployment decreased from 7.5 percent to 6.9
percent between January and February. Employment in the area totaled about 27,100 and unemployment totaled about 2,000.

Unemployment in Elko and Eureka counties decreased from 4.7 percent to 4.4 percent from month to month. There were 26,800 people working in the area during February and about 1,200 without jobs.

A month-to-month breakdown of hiring statewide by specific industries showed 6,200 more workers in government, mainly due to teachers returning from breaks to schools and colleges. Casino-related leisure and hospital hiring held steady.

There was a decrease of 700 retail employees; 900 more workers
in education-health services; and 300 more employees in professional business services.

Transportation-warehousing-utilities was up 100; manufacturing was up 200; information service hiring was up 100; mining held steady; and financial activities hiring was down 300.
On the Internet:
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(Copyright 2008 by The Associated Press. All Rights Reserved.)

AP-NY-03-28-08 1545EDT