Unemployment, TRANSFORMING OUR BUSINESS CLIMATE, Labor
GSI Analysis: July ’21 Jobs Report – NJ Sees Positive Private Sector Job Growth in July While Unemployment Remains High
Unemployment rate increases in July to 7.3%, well above 5.4% US average
State adds 14,600 jobs, remains 275,000 below early 2020 peak
Resident employment growth lags nationwide surge
On August 19th, New Jersey’s Department of Labor and Workforce Development issued the monthly jobs report for July 2021. Dr. Charles Steindel, former Chief Economist of the State of New Jersey, analyzed the report for the Garden State Initiative:
New Jersey gained 14,600 jobs in July. In normal times, that would be a strong increase, but in light of the still-large shortfall from the early 2020 peak, and the national increase of 943,000 in July, the number isn’t all that impressive. However, if we look only at the private sector the results are substantially better, with an increase of more than 21,000, which is well in line with the 703,000 national rise. There was a large 6,500 drop in government jobs in New Jersey; this was radically different than the strong increase in government employment across the nation. July always sees a large drop in government jobs in New Jersey after the end of the school year; for whatever reason this year the drop was larger than the seasonal adjustment factors had assumed.
New Jersey’s July unemployment numbers were softer than the job figures. The unemployment rate ticked up from June’s 7.2% to 7.3%, widening our gap with the national figure (5.4% in July) to nearly two percentage points. The 9,000 increase in our labor force was at least in line with the national figure of 261,000, but the 7,500 increase in resident employment was paltry compared to a nation-wide surge of more than 1 million.
Within the private sector information and financial activities saw declines, while all other sectors were flat or up. Construction, which had been weak in recent months, saw a strong 4,000 gain. Leisure and hospitality, where job growth had been quite strong, grew only 1,300, but before seasonal adjustment the increase there was much larger. Perhaps the most encouraging gain was the 6,900 increase in professional and business services; this gain appears to be broad-based across the industries in this sector—not just a pickup in administrative support areas, such as landscaping and waste management.
July’s overall job gain was in line with the average we’ve seen since January. The state is still nearly 275,000 jobs shy of the February 2020 peak, which would suggest that at this pace of growth we will not set a new peak until early 2023. However, yesterday the Bureau of Labor Statistics released data suggesting that the number of jobs in New Jersey’s total was significantly understated early this year; quite possibly by more than 50,000. This information, to be reflected in next winter’s regular revision of the data, suggests that we might get back to peak employment sometime in 2022, assuming that the national economic expansion continues.