City National Bank: ‘Nevada is the fastest growing labor market in the nation’
RENO, Nev. — Chris Thornberg, a nationally known media commentator and expert in economic and revenue forecasting, smiles as he pulls up the next slide of his presentation.
The slide’s title: “State Economic Performance.”
Thornberg doesn’t need to do any forecasting; he knows there’s no better audience for this piece of information than the few dozen folks seated inside The Grove at South Creek in south Reno for the City National Bank 2018 Economic & Investment Forum.
A founding partner of Los Angeles-based Beacon Economics, Thornberg was the keynote speaker of the forum.
“I don’t need to tell you,” said Thornberg, his smile growing, “but, yes, Nevada is the fastest growing labor market in the nation.”
In all, top-ranked Nevada has seen a 3.4 percent labor market growth on an annual basis, said Thornberg, citing Bureau of Economic Analysis (BEA) statistics.
“After being hit so hard in that downturn, both because of internal problems having to do with housing and external problems because of the rapid decline on the entertainment and recreation industry, Nevada is back in a big way,” Thornberg said. “And it’s not the same old economy.”
Gone are the days of gaming and entertainment being the central drivers of the economy in Northern Nevada, Thornberg said. He pointed out that manufacturing is far and away the region’s leader in employment gains (27.9 percent).
Thornberg said the unemployment rate in Reno is at roughly 4 percent, the lowest it’s been over the last decade. In addition, average annual wages are climbing in Storey County ($51,000), Washoe County ($47,000) and the Silver State as a whole (same as Washoe).
The engine of that job growth is Storey County, which added more than 9,000 jobs in 2017, Thornberg said. The Tahoe Reno Industrial Center (TRIC), the largest industrial park in the world at 107,000 acres, is sprawled roughly nine miles east of Reno-Sparks in Storey County.
Most notably, TRIC is home to tech/manufacturing giants Tesla, Panasonic, Switch and Google, among other big companies.
“You’ve got all sorts of companies moving out to the desert, it’s a wonderful place that’s booming,” Thornberg said. “Call me in a couple years, it’s going to be well over 12-13,000 jobs there. And, remember, they’re working out there and living here, and that’s what’s driving the numbers.”
From an economic output perspective, the finance, insurance and real estate (FIRE) sector leads the way at 25 percent, followed by professional services (14.8 percent) and manufacturing (13.3 percent), in terms of industries that are thriving the most in the Silver State.
Quite simply, the influx of new business and industry has created a more balanced economy and an improving reputation.
“For a number of years, Reno itself was always considered to be that odd little place in the northern part of the state,” Thornberg said. “No, no, that’s absolutely not the case.”
Thornberg examined the national economy, as well. During the brief Q-and0A session to cap the forum, he fielded a question centered on the country’s wealth inequality. He said the Federal Reserve recently released its 2016 survey of consumer finances, which showed the top 1 percent owned about 40 percent of all wealth in the U.S.
“It’s never been that high since the 1930s, that’s the last time so much wealth was in the hands of so few people,” he said. “So we’re entering a period of time when we’re going to have to cut back on promises we have made to people in regards to their healthcare and financial support in their retirement years. And in a period of time when half of Americans are less able than ever to deal with that.
“That’s an enormous social crisis.”
To further illustrate his point, Thornberg, an adjunct professor at UC Riverside School of Business, said he tells his macroeconomics class that the second-richest country in the world per capita in 1900 was Argentina. But due to a massive consolidation of wealth, he said, the system was distorted and it harmed the nation financially.
Argentina now ranks 21st in the world in gross domestic product (GDP).
“It’s dangerous to have massive built-in wealth in a small group of people like that from a political standpoint,” said Thornberg, who in 2006 warned that the U.S economy was headed for a crash. “Are we going Argentina? No. Have we gotten to that point? No. But we’re trending there. And trends are powerful; you’ve got to pay attention.”
On April 1, Nevada Gov. Steve Sisolak formally issued a “Stay at Home” directive for Nevadans and extended closures of nonessential businesses, gambling and school closures to April 30.