GSI Analysis: New Jersey’s GDP and Income Ended 2025 on a (Relatively) High Note

• Q4 growth in both GDP and Personal Income better than the nation’s, though gains in both lagged for 2025 as a whole.
• Q4 performance distorted by the federal shutdown.
• Despite our sluggish growth, the state is now a $900 billion economy.

New Jersey’s real GDP growth rate is estimated to have been .9% in the fourth quarter of 2025, a bit better than the nation’s .5%. While that’s not a very robust growth rate, it was still better than all but two Northeastern states (New Hampshire and Massachusetts). New Jersey’s relative performance was the result of a more limited effects of the federal shutdown here. The decline in federal civilian activity dragged down the national GDP growth rate by .7 percentage points; the cut to New Jersey’s growth rate was only .3 percentage points. In other words, ex-federal civilian output, New Jersey’s GDP grew at a .8% rate, while the national rate was 1.2%.

As the ex-federal figures suggest, New Jersey’s GDP remains laggard. In both the second and third quarters of 2025 New Jersey’s GDP growth trailed the nation, and for 2025 as a whole, the state’s real GDP was 1.8% higher than in 2024, compared to the national gain of 2.1%. Nonetheless, in the fourth quarter New Jersey’s annual rate of current-dollar GDP surpassed $900 billion.

Our personal Income performance was roughly comparable to that of real GDP. The Q4 growth rate here was 3.9%; compared to the national figure of 3.4%. Net earnings—compensation of employees plus the profits of noncorporate firms—rose at a 5.3% annual rate, well above the nation’s 4.0% and one of the highest rates in the nation (New York also saw comparable earnings growth). For 2025 as a whole, New Jersey’s income grew 4.4%, while the national increase was 4.9%.