As more forgo finding work, Nevada jobless rate drops

Nevada's record unemployment rate was higher in December than previously reported, reaching 14.9 percent statewide and 15.1 percent in Las Vegas, state officials said Thursday.

The Department of Employment, Training and Rehabilitation said while January's jobless report showed a decline to 14.2 percent statewide, the drop was caused not by job creation but people leaving the workforce.

"It appears likely that some jobless Nevadans are becoming discouraged and giving up their search for work and dropping out of the labor force," said Bill Anderson, chief economist with the agency. "In addition, given stagnant population levels, it is also likely that some Nevadans are leaving the state."

In the Las Vegas area, the jobless rate fell to 13.7 percent in January. It was 13.3 percent in the Reno-Sparks area, 13.6 percent in Carson City and 7.6 percent in Elko.

Nearly 188,000 Nevadans remain out of work, the report said. Roughly 10,700 workers dropped out of the job market in January, reducing the number of unemployed by nearly the same amount.

Elliott Parker, an economist at the University of Nevada, Reno, said about as many people left the labor force in January as were lost in the last four months combined.

"Assuming we could stabilize our number of jobs, we would need 77,000 more people to leave the labor force to bring us down to the national average," Parker said. The national jobless rate fell in January to 9 percent.

Parker said that kind of exodus from the job market would lead to an overall population decline of 150,000.

"Historically speaking, this is beginning to look like what happened in Nevada after the silver ran out in Virginia City" in the 1800s, he said. "Nevada declined for more than two decades and lost a third of its population. Back then it took 50 years for Nevada to return to sustained growth."

The report said the retail sector shed 5,900 mostly seasonal jobs in January, while construction continued to contract, losing another 3,400 jobs.

Leisure and hospitality, a key indicator of the health of Nevada's dominate tourism economy, lost 3,900 jobs during the month after a revised gain of 2,700 jobs in December.

The only industry to increase employment was the health care and social assistance industry, which added 400 jobs.

Despite the dip on January jobless numbers, Anderson cautioned that Nevada is far from real economic improvement.

"The recent surge in gas prices will undoubtedly affect travel to Nevada and continued pressure on government payrolls will likely offset any near term improvement in private sector hiring," he said.

"It appears Nevada will continue to move sideways, bouncing along the trough of this recession for the foreseeable future."