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May 16, 2022

The Southern Nevada labor market continued to recover into the new year, as job growth brought employment ever closer to pre-pandemic levels. The ongoing expansion of the labor market and the regional economy as a whole was still hindered by a tight labor market where wage increases have been eroded by inflation.

In March 2022, regional employment surpassed 1.04 million, the highest job count since February 2020 and within 9,200 jobs of the pre-pandemic level. Since the low point in May 2020, Southern Nevada had regained nearly all of the 277,900 jobs lost in the early months of the pandemic and was on pace to reach pre-pandemic job counts in the next few months. On an annual basis, the region added 112,700 jobs over the past 12 months, equating to a 12.1 percent annual growth rate.

The improving employment picture pushed Southern Nevada’s unemployment rate down to 5 percent in March 2022, a post-pandemic low and half of the 10.3 percent reported a year earlier. However, Southern Nevada’s unemployment rate remained higher than the 3.3 percent national average, and it ranked as the second highest among the 51 large metropolitan areas in the United States. Although the unemployment rate was relatively elevated, demand for new workers remained strong throughout the Silver State.

Job openings in Nevada stood at 106,000 in February 2022 (latest data available), the 10th consecutive month above 100,000. The current level was noticeably lower than the peaks last summer of 157,000 openings but was well above the 2019 average of 67,000. During the recent period of declining unemployment and higher-than-normal job openings, the number of available jobs per unemployed worker has hovered near 1.5, the highest level recorded since data collection began a decade ago. However, the hiring rate returned to normal levels in early 2022, leaving about four in 10 new job openings unfilled. Other measures of the labor market had begun to stabilize in the new year. Layoffs were lower than 2019 levels, and the employee quit rate had declined to 2019 levels following the surge in mid-2021.

The tight labor market has contributed to rising wages in Southern Nevada, though in recent months the gains have barely outpaced inflation. Average weekly wages in March 2022 grew 10.2 percent over the year to reach an all-time high of $967. However, when inflation is considered, annual wage growth equated to just 1.5 percent. The combination of the competitive labor market and high inflation will continue to exert upward pressure on wages while they continue in Southern Nevada.

The U.S. Federal Reserve has taken steps to address inflation by increasing a key interest rate twice already this year, and it has signaled that additional rate increases later this year depend on the trajectory of inflation. On the labor market side of the equation, the supply of available workers continues to lag pre-pandemic levels. As of March 2022, the Southern Nevada labor force was 47,000 smaller than in February 2020, and the labor force participation rate remained well below where it was in 2019. Until a larger portion of potential workers return to the labor force in search of work, the current tight labor market is likely to persist.

To keep up to date with city of Las Vegas data from Applied Analysis, visit the community dashboard.

Photo: International Innovation Center @Vegas

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