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Center Square NJ: ‘Most of this was stimulus’: Promising economic data for New Jersey linked to federal checks
By Kim Jarrett
(The Center Square) – Amid months of dismal economic news, New Jersey has received what appears to be some positive news.
Wage growth during the second quarter was at 63 percent, according to the U.S. Bureau of Economic Analysis, which releases personal income by state. But that is not the whole story, according to Dr. Charles Steindel, former chief economist for the state of New Jersey and a resident scholar at the Anisfield School of Business at Ramapo College.
One category is “government transfer payments,” which include Social Security, Medicare, unemployment insurance and any stimulus payments. New Jersey residents, along with other Americans that met income requirements, were given $1,200 during the second quarter.
“There’s no question most of this was stimulus,” Steindel said in an interview with The Center Square. “Wage income just collapsed in New Jersey. It fell a little bit more in New Jersey in most places, not drastically but somewhat more in New Jersey than in other places probably because we were more thoroughly shut down in the second quarter.”
An additional $600 a month given to unemployed workers also drove wage growth up, according to Steindel. The benefits were given to freelance and gig workers, who were not previously eligible for unemployment.
And that’s not the only strange thing about the numbers. New Jersey’s numbers were higher than New York’s, which had a bigger drop in wages during the second quarter.
“But the transfer components in New Jersey rose four times as fast as New York,” Steindel said. “That is just a strange quirk of how the money was delivered, or something like that. Somehow the money got to New Jersey faster.”
The economic numbers that people rely on are act very strangely in the pandemic,” Steindel said.
“The pandemic has created a lot of distortion not only in the economy but how we look at the economy,” he said.
Other figures show that employee wages at New Jersey businesses fell by 31.5. percent, which is great than the national rate of 27.5 percent, according to information from the Garden State Initiative.
Read the full report here.