GSI Analysis: New Jersey Income and Output Continue to Move Up, GDP Rate still lags behind Nation

• 2024: Q2 personal income growth rate higher than the nation and ranked 12^th but regionally lagged behind New York, Pennsylvania and Washington DC.
• State GDP growth somewhat less than the nation, putting us a lackluster 34^th.
• Revisions boosted estimates of both income and output.

On September 27th, the U.S. Bureau of Economic Analysis issued its report on the Gross Domestic Product by State and Personal Income by State, 2nd Quarter 2024. Dr. Charles Steindel, the former Chief Economist of the State of New Jersey, analyzed the report for the Garden State Initiative:

Despite faltering job growth, New Jersey incomes were well-maintained in the second quarter of 2024. Aggregate personal income grew at a sturdy 5.5% annual rate, a bit higher than the nation’s 5.3%, and ranking the state 12^th in the country (New York was the only state in the Northeast with faster income growth). The composition of income growth was also good: Net earnings—wages plus the income of unincorporated businesses—rose at a 6.4% rate, just above the national average of 6.3%. The Mideast region of the country was unusually strong there, but regionally New York, Pennsylvania, and DC outperformed New Jersey with higher growth in this component than we did.

State output (GDP) also grew in the second quarter, but its performance was somewhat softer than income. Real GDP rose at a 2.4% annual rate, some distance under the nation’s 3.0% pace, and we ranked a soft 34 (only Maryland was lower in the Mideast; New York grew at a 3.8% rate). Our current-dollar (nominal) GDP grew at a 4.9% rate, also noticeably under the nation’s 5.6%. Looking at the industry composition of growth, we trailed the nation in numerous sectors, with agriculture, construction, durable goods manufacturing, wholesale trade, and information with notably larger gaps (New York benefited from unusual strength in finance, which surely also helped to boost income there).

This release, like yesterday’s national GDP, was accompanied by revisions of the numbers for the last few years. Like the nation, estimates of income and GDP in New Jersey have been boosted, with recent levels about 1 percent higher. The second quarter estimate is that the current-dollar value of New Jersey’s GDP was slightly higher than $840 billion (at an annual rate), and the annual rate of personal income edged past $800 billion.