GSI Analysis: New Jersey’s Jobs Numbers Brighten in May

• Unemployment rate declines to 7.2% though remains well above US average 5.8%

• Leisure and hospitality leading growth sector with 6,200 jobs added

• Construction’s continued weakness possibly a result of shortages of building materials

On June 17th, New Jersey’s Department of Labor and Workforce Development issued the monthly jobs report for May 2021. Dr. Charles Steindel, former Chief Economist of New Jersey’s Treasury Department analyzed the report for the Garden State Initiative:

New Jersey’s added 13,600 jobs in May. This was the third time in four months job growth exceeded 10,000 (and April’s increase was revised up to 4,900). While the total gain since January has been nearly 50,000, NJ is still more than 300,000 short of the February 2020 peak.   After the virtual standstill from September to January, continued and reasonably steady progress looks to be underway.

In May, leisure and hospitality was, once again, the leading growth sector, with 6,200 jobs added as the summer season loomed (this is a seasonally adjusted figure—hiring was much higher than the 20,000 increase the seasonal adjustment factors had assumed). Education and health services, another sector hard-hit by the pandemic, had a 2,500 increase, and trade, transportation, and utilities rose by 3,000 (there likely was a gain in retail employment over and above what the seasonal factors anticipated).

Construction continues to be oddly weak, with the job count down 2,200. As in the case for other sectors, the seasonal factors assumed a marked gain in May as the traditional building season moves ahead but hiring fell short of the mark. It’s not altogether clear what has hampered job growth in construction. It’s possible that shortages of building materials may be holding back activity and employment.

The numbers on unemployment and the labor force were somewhat less positive than the job figures. The unemployment rate registered its third straight drop, moving down to 7.2 percent from April’s 7.5 percent. However, our rate is still noticeably above the nation’s 5.8 percent average, and the gap was unchanged in May. Moreover, the unemployment decline was partly due to a drop in the state’s labor force, and our labor force decline of 6,200 looks fairly large relative to the nation’s 53,000 loss. Still, all in all, May’s report was on the positive side.