For yet another month, Nevada’s topline employment figures moved in a positive direction. Total employment grew for the 10th consecutive month, while the state’s unemployment rate dipped to the lowest level since March 2020. These indicators show Nevada is well on its way toward returning to pre-COVID-19 conditions, but they miss an important element of the economic recovery. Although statewide employment climbed and the unemployment rate trended downward, the state’s labor force participation rate remained relatively stagnant and depressed from levels exhibited prior to the COVID-19 recession.

Compared to the traditional unemployment rate, the labor force participation rate provides a more accurate reflection of the potential workforce, as it accounts for adults who are not in the labor force. These adults may have retired, are in college, have become discouraged and given up on trying to find a job or a host of other reasons. The traditional unemployment rate only counts the currently employed and the unemployed who are actively seeking work.

In October 2021, Nevada’s labor force participation rate stood at 61.0 percent. While that was an improvement from the 58.0 percent in May 2020 during the early months of the COVID-19 pandemic, it remained well below pre-pandemic levels and even lagged the 62.0 percent from October 2020. Before the pandemic, Nevada’s labor force participation rate surpassed 65 percent amid a three-year upward trend. The gap in participation rate from then to today equates to 99,000 fewer potential workers in the labor force.

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