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Moody's and state economists warn tariffs and uncertainty will slow U.S. and Nevada growth
Summary
Moody's Analytics and Nevada state economists told the Economic Forum on May 1 that new reciprocal tariffs and resulting uncertainty have reduced national growth expectations and will slow Nevada's economy, with the tourism and leisure sectors most exposed.
Moody's Analytics and Nevada state forecasters told the Economic Forum on May 1 that a recent escalation in U.S. trade tariffs and related policy uncertainty have reduced their growth outlooks and are likely to slow employment and consumer spending in the months ahead.
Emily Mandel, associate director and senior economist at Moody's Analytics, said the firm has "significantly downgraded" growth expectations since its November 2024 forecast, largely because announced tariff measures raise costs and uncertainty for businesses and households. Mandel said Moody's baseline still avoids a technical recession but forecasts materially slower GDP and job growth unless trade policy pivots by mid-summer.
The forecast incorporates two opposing channels for sales-tax revenues: higher import prices (which would raise nominal sales tax collections) and weaker consumer spending (which would lower collections). "We're expecting a modest decline in the current fiscal year followed by low growth in the next two years," Mandel said.
David Schmidt, chief economist for the Nevada Department of Employment, Training and Rehabilitation, said hard employment data remain relatively strong through March but are lagging the recent policy changes. Nevada's employment growth has slowed compared with recent years, Schmidt said, and the unemployment rate has edged up; he expects labor-market slack and longer job-search durations to increase before conditions normalize.
Both presenters identified tourism as a primary channel for Nevada exposure. Mandel said international visitation (notably Canadian travel) and convention traffic have weakened and will likely weigh on gaming and hospitality receipts. Schmidt concurred that leisure and hospitality and retail led the slowdown already visible in Nevada's data and that persistent uncertainty will make businesses more likely to defer hiring or new projects.
Why it matters: Nevada's tax base is heavily tied to tourism-driven sales and gaming revenues. The forecasters told forum members that higher prices from tariffs, falling consumer confidence, and weaker international visitation could reduce state revenue growth and complicate budget planning for the 2025' 27 biennium.
Quotes from the meeting: "We have significantly downgraded our growth expectations for the United States and for the state of Nevada," Emily Mandel, Moody's Analytics. "Uncertainty does make it harder for businesses to invest. It does itself act as a slowdown on growth as businesses keep their powder dry," David Schmidt, Department of Employment, Training and Rehabilitation.
Going forward: Forecasters said the outlook is highly conditional on trade-policy decisions and consumer sentiment. Mandel and Schmidt both noted they expect to see the clearest effects appear in the data beginning in June releases and through the summer if tariffs remain in place.
