CARSON CITY, Nev. (AP) - Nevada's unemployment rate declined in October for the first time in four years, but economists Friday cautioned that while the figures are encouraging, they're more a reflection of a shrinking job market than job creation.

The statewide jobless rate dropped to 13 percent in October, down from a record 13.3 percent a month earlier, according to the state Department of Employment, Training and Rehabilitation report.

Still, Nevada's jobless rate remains the second-highest in the nation behind Michigan and nearly 3 percentage points above the national average of 10.2 percent.

In Nevada's urban hubs, the jobless rate dropped to 13 percent from 13.9 percent in the Las Vegas area, and 12.2 percent from 13.1 percent in the Reno-Sparks area.

Elsewhere, the jobless rate fell to 11.7 percent from 12.8 percent in Carson City and to 6.4 percent from 6.9 percent in the Elko region.

Roughly 175,300 Nevadans were looking for work in October, the report said.

"The state's well-chronicled economic difficulties are far from over," said Bill Anderson, chief economist for the state agency.

"We expect the unemployment rate to continue to rise over time,
but we're are seeing some signs of stabilization."

In October, the report said there were 1.18 million public and private sector jobs in Nevada. That's a decline of 75,100, or 6 percent, from a year ago, and roughly the same number of jobs as October 2004.

Those figures, Anderson said, suggest "that the current economic downturn has erased five years of expansion."

Gov. Jim Gibbons said unemployment rates are expected to rise in November and December, when several Las Vegas Strip projects are completed and construction jobs are eliminated.

Construction jobs, which peaked in mid-2006 at close to 150,000
statewide, declined to 83,700 in October, Anderson said. Jobs in
the leisure and hospitality sector, a barometer of Nevada's tourism-dependent economy, totaled 307,700 in October, 2,000 fewer than September and nearly 20,000 from a year ago.

Elliott Parker, an economist at the University of Nevada, Reno, said he doesn't expect the number of jobs to increase "for awhile."

"There's a lot to catch up on, and unemployment usually takes a lot longer," he said.

Parker noted that the jobless rate in California, a key tourism market for Nevada, rose last month to 12.5 percent.

"Their labor force also went down, so it does not appear that our unemployed are simply moving a little west," he said "The more unemployed there are in California, the fewer people there are who will be visiting Nevada with any money to spend."