Nevada's unemployment rate fell for a second consecutive month in November to 12.3 percent from a revised 12.9 percent in October, mainly because of a shrinking work force, state officials said Thursday.
About 161,000 Nevadans were actively seeking work last month, the report said.
"On the surface, the decline in the rate is a positive sign, indicating the recession is beginning to subside," said Bill Anderson, chief economist for the state Department of Employment, Training and Rehabilitation.
But Anderson said a detailed review of the report "reveals a troubling trend."
Nevada's labor force contracted for the second month in a row, falling by 1.5 percent, meaning roughly 13,900 workers either left the state or had stopped seeking employment.
Anderson added that reassessments of employer surveys over the past year may have underestimated Nevada's job losses. Every year, monthly employment estimates are compared to actual employment data collected quarterly from about 60,000 employers covered by unemployment insurance laws.
"This year we will likely see one of the biggest benchmark re-estimates ever recorded, and a realization that Nevada's labor market is worse off than originally estimated," he said.
Elliott Parker, an economist at the University of Nevada, Reno, said the report has a bright side.
"It means a little less competition for jobs," Parker said, adding, "These are the first steps on a long road up, but at least we are no longer headed downhill."
Economists have said that while the nation sees glimmers of economic recovery, Nevada's troubles might persist because of the collapsed housing market and dependency on sales and casino taxes.
The jobless rate dropped to 12.1 percent in the Las Vegas area from 13 percent in October, the largest one-month drop on record since 1990, the report said.
In the Reno-Sparks area, the rate fell to 11.3 percent from 12.2 percent.
Elsewhere, the jobless rate fell to 11.2 percent from 11.8 percent in Carson City, 5.9 percent from 6.4 percent in the Elko area, 8.7 percent from 9.3 percent in Churchill County, and 11.8 percent from 12.1 percent in Douglas County.
Nevada's unemployment, which hit a record 13.3 percent in September, is still ahead of the national unemployment rate of 10 percent.
An industry breakdown shows Nevada's leisure and hospitality sector, a driving force of the state's economy, continues to struggle. The industry reported 302,500 jobs in November, 6,300 fewer than in October. In the past year, 20,400 leisure and hospitality jobs have been lost.
Over the year, the state has lost 27,100 construction jobs, about 1,100 of those since October.