Nevada has lots of new jobs. Why is unemployment still so high?

As candidates for governor point to different statistics, actual economists say the full picture on the economy is more complicated.

Tabitha Mueller
September 21st, 2026 at 2:00 AM

Editor’s note: This is the second of three stories focusing on how the economy is playing out in November’s election. You can read the first one here.

Nevada’s August jobs report made history — the state’s unemployment rate, among the nation’s highest, dropped below 5 percent for the first time since the 2020 COVID-19 pandemic.

Less than an hour after the report was released Thursday, Gov. Joe Lombardo’s (R) office highlighted the drop in a laudatory statement, saying it reflects “what happens when you create a business environment built for growth and diversification.”

It’s the latest positive trend line touted by the Republican governor seeking re-election, a list that includes the state’s rank in job growth (about 100,000 since taking office) and private investment (more than $6 billion).

Yet separately on Thursday, the cost of a gallon of diesel gas hit an all-time high in Nevada, with Lombardo’s general election opponent, Democratic Attorney General Aaron Ford, using that statistic along with others to craft a counter-narrative that things have gotten too expensive in the “Lombardo-Trump economy.”

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With Nevada voters telling pollsters that economic issues are their top priority, it’s no surprise that 2026 candidates for governor are both staking their campaigns on the issue.

But with more jobs, why has the state’s unemployment rate remained so high? And what do these macro-level trends mean for everyday people?

Economists told The Nevada Independent that instead of a single magic-bullet statistical explanation, the answer to the real state of Nevada’s economy lies in its growing population, tourism-centric economy and cost of living.

“I like to say it’s higher, not high,” David Schmidt, the state’s chief economist, said in an interview about Nevada’s unemployment rate. “I don’t look at the unemployment rate and go, ‘Wow, that number is really high.’ Like, is it among the higher rates in the country? Yes, but I think long term our trend tends to be a few 10ths of a percent, maybe half a percent-ish above the national average.”

He added that job growth and unemployment aren’t directly related. The statistics come from two surveys that measure different factors, and in Nevada’s case, both can rise at the same time.

Economist John Restrepo, who has analyzed regional economies and real estate trends for more than 40 years, shared a similar perspective. Through July, Nevada’s labor force grew by 16,116 while the number of unemployed fell by 2,677, he said.

“People keep moving here, and they look for work before they find it,” Restrepo said. “Nevada has also run above the national rate for most of two decades, under both parties, because a tourism-concentrated economy generates more hiring churn than a diversified one.”

Nicholas Irwin, an economics professor at UNLV, said the 2024 election results indicated voters were unhappy with the high cost of living, and those same issues are bubbling up again. He described the economy as having a K-shaped recovery after the COVID-19 pandemic, where some are doing really well while others struggle to afford basics like rent and food.

“The stock market is doing wonderful. People who have 401(k)s, it’s great for them, but not everyone necessarily has a 401(k),” Irwin said. “A lot of workers are younger in their careers and aren’t so much worried about retiring. They’re worried about getting there.”

Schmidt added that even with better job numbers, wages still haven’t kept up with costs and inflation.

“Why does it feel like things are pinching? Because things are pinching,” he said…