GSI Analysis: New Jersey Output Fell at the Start of the Year

• Real GDP declined at a 1.0% annual rate, under the national rate.
• Personal income rose at a 6.5% rate, in line with the nation.

New Jersey’s real Gross Domestic Product (GDP) is estimated to have declined at a 1.0% annual rate in the first quarter of 2025. Except for Maine, this was the weakest performance in the Northeast, and New Jersey ranked 29^th in the nation. National GDP fell at a .5% annual rate. Basically, the first quarter continues the very long trend that New Jersey’s growth typically lags the nation’s by about ½ to 1 percentage point. Still, the stark appearance of the -1% number stands out (it was the first decline in three years).

State GDP is computed by combining estimates of the output of the industries in the state. No one New Jersey industry stood out as especially weak (compared to the national average) in the first quarter; indeed, a few did a bit better. In contrast, New York, where the rate of contraction was -.7%, was clearly weighed down by finance. Ex-finance, New York grew at a .7% rate, while New Jersey fell at a .4% rate.

Personal income was much better. The income of New Jersey residents rose at a 6.5% annual rate in the first quarter, just a tad under the nation’s 6.7% growth rate. Net earnings—compensation earned by employees plus the earnings of unincorporated businesses—rose at a 4.9% annual rate, again comparable to the nation’s 5.0% pace. Personal income growth in New Jersey was better than the average Northeastern state (New York’s growth rate was 6.1%), though income of Pennsylvanians rose at a hefty 7.3% rate.