Nevada’s jobless rate among nation’s highest, but economists aren’t alarmed

Nevada had one of the highest unemployment rates in the nation in October amid a tight labor market and a shifting labor landscape, but local economists say not to sound the alarm.

The latest figures from the Bureau of Labor Statistics showed the unemployment rate in Nevada reached 4.6 percent in October, tied with Illinois for the highest rate among the 50 states. Only the District of Columbia had a higher jobless rate — 4.8 percent — last month.

Neighboring Utah was tied with Minnesota for the lowest unemployment rate at 2.1 percent.

Several factors contributed to the comparatively high unemployment rate, most notably a higher labor force participation rate. That is, the share of the state’s population actively looking for work, available for work or already working has gone up 0.8 percentage points, to 60.9 percent, in the last three months, said David Schmidt, chief economist at the state Department of Training, Employment and Rehabilitation.

He also noted the state is keeping pace with the rest of the country because the monthly unemployment rate in both Nevada and nationwide went up 0.2 percentage points. (Nationally, the unemployment rate was 3.7 percent for October, up from 3.5 percent in September.) While Nevada’s unemployment rate ticked slightly higher last month, it was down 0.8 percentage points from a year ago.

Economists have been encouraged by the slight growth in the unemployment rate because it suggests the Federal Reserve’s aggressive monetary policy to curb inflation could be loosening the labor market.

“Broadly, I see this as more positive than negative – more people are entering the labor force, and most of those who do are finding work, though there’s an increase in those looking for work as well,” Schmidt said. “The rising participation rate is a good sign of a recovering economy, and it’s worth noting that while the number of unemployed people rose this month, so did the number of employed people.”

Jeff Waddoups, a labor economist at UNLV, said weaker recoveries in various industries could be at play in Nevada’s numbers. For instance, unemployment in the accommodation sector nationwide was at 6.9 percent and the arts, entertainment and recreation sector reached 7 percent.

“My guess is that we have high unemployment in Nevada because our industrial composition happens to be skewed toward industries with high unemployment, and this is likely a result of a hangover from the pandemic,” Waddoups said in an email.

Andrew Woods, director of the Center for Business and Economic Research at UNLV, said he was encouraged by the growing labor participation rate. He said increasing the participation rate to pre-pandemic levels — near 64 percent according to the BLS — was most important to recovery and the state’s economic growth.

“In the short-run, it’s not surprising to see that we’re still the highest unemployment rate, with transient workers and still a lot of job openings in our largest sector,” Woods said. “What I think is more concerning is what happened to (the workers) that should still be in the workforce?”

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on Twitter.