GSI Analysis: Jan. ’23 Jobs Report – Strong 2023 Start for NJ’s Labor Market, Despite Uptick to Unemployment

• January’s increase in jobs among nation’s highest
• Substantial upward revisions to 2022 jobs count
• Rise in unemployment rate to 3.4% in January attributable to a marked increase in the labor force size

On March 13th, New Jersey’s Department of Labor and Workforce Development issued the monthly jobs report for January 2023 and revisions for calendar year 2022. Dr. Charles Steindel, former Chief Economist of the State of New Jersey, analyzed the report for the Garden State Initiative:

New Jersey employers increased their payrolls by 24,200 in January. This was the 4^th time in the last 12 months that there was a gain of more than 20,000 jobs. The only notable sector to see a decline was professional and business services, and that drop was the result of losses in support areas. Leisure and hospitality had a marked increase of 9,400, but the total job count in that sector is still slightly below the pre-pandemic peak. Construction employment, which had been sluggish through most of 2022, saw a gain of 4,000 to set a new peak (the pre-recession peak had been exceeded a few times last year). It’s possible that the unusually mild winter weather affected these sectors: helping leisure and hospitality and construction, but leading to a drop in some business support activities, such as snow removal.

New Jersey’s January increase was the fifth largest in the nation, being exceeded only by the 4 largest states (California, Texas, Florida, and New York), and in percentage terms our 0.6% gain exceeded all of theirs (and only the 0.7% in Arizona and Tennessee were larger). New York’s gain of 28,400 was only slightly above ours, Pennsylvania’s 14,800 gain was not seen as statistically significant (its margin of error includes zero) nor was Delaware’s 2,300 increase. Massachusetts and Connecticut both had good increases, but smaller than ours. New Hampshire was the only other Northeastern state that did as well in percentage terms as New Jersey.

The January release was accompanied by the usual revision to earlier data. As expected, there were notable increases in the estimates of New Jersey’s monthly job counts in 2022, ranging from about 20,000 to 50,000, and averaging a bit over 37,000. The new data show that New Jersey had recovered all the jobs lost to the pandemic by February 2022, several months earlier than previously thought.

New Jersey’s unemployment rate ticked up from 3.3% in December to 3.4% in January, matching the national figures for that month (the national rate did increase to 3.6% in February; our figure for that month won’t be available until late next week. The increase in unemployment can be accounted for by a strong increase in the state’s labor force (more than 14,000) exceeding a 7,700 gain in the number of employed state residents. Our unemployment rate remains well below those of New York, Pennsylvania, and Delaware, and Maryland remains the closest state with a lower rate (3.0%).