Northern Nevada's job market may begin to experience a turnaround in the first two quarters of 2011, according to Nevada State Bank economist Jeff Thredgold.
Thredgold's remarks were made to a crowd of business leaders who gathered inside the Carson Valley Inn Tuesday morning for a breakfast meeting hosted by the Northern Nevada Development Authority and the Carson Valley Chamber of Commerce. Thredgold focused most of the presentation on national and global economic trends.
"About half of the states in the country have begun to add jobs in the last 12 months and Nevada, I would suggest, will see that change taking place early next year," Thredgold said, adding job growth will begin "turning positive month over month in about the first quarter and year over year ... perhaps by the second quarter (in 2011)."
Thredgold said Nevada, currently with the nation's highest unemployment rate of 14.5 percent, may see positive job growth if more businesses from California consider moving east.
"As you know California shoots itself in the foot about every 10 years and fuels economic growth in a dozen states, and Northern Nevada can continue to draw talented people and their money and their businesses away from this crazy-run state of California," he said.
Elliott Parker, the chairman of the department of economics at the University of Nevada, Reno, said the U.S. economy has been recovering at a slow pace for about a year.
"I think Nevada appears to have stopped its slide on many measures, and we are now, 'bouncing along the bottom,' so maybe we will start to follow the rest of the country," Parker said in an e-mail, adding California has created about 125,000 jobs since January, while Nevada has lost about 42,000.
"Having our huge neighbor start to recover will eventually have a positive effect on us," he said. "No surprise our high unemployment rate is pushing people to move elsewhere. And I do agree that Northern Nevada is better placed than the South at the moment."
Parker also cautioned, "if the Legislature and/or the governor take an ax to higher education again, all bets are off."
Thredgold said the national economy is expected to grow at a "mediocre" rate of about 2.5 percent to 3 percent through 2011 as a result of anxieties about real estate markets, near double-digit unemployment and projected national deficits of about $1 trillion.
He also noted that job growth nationwide is sluggish with about 100,000 jobs added a month, fewer than the 140,000 new jobs required to keep up with increases in the labor force.
Thredgold said rates for 30-year fixed mortgages, currently under 5 percent, may begin to increase as a result of long-term interest rates inching up after the Federal Reserve announced its plan last week to buy $600 billion in government bonds and assets.
"I recognize that one out of every four homeowners in this country is underwater on their mortgage and seven out of 10 homeowners in Nevada are underwater on their mortgage," he said. "But if you have the ability to refinance or have the ability to finance a new home ... the timing is extraordinary."
