Income Tax, TRANSFORMING OUR BUSINESS CLIMATE, Labor
GSI Analysis: Nov. ’19 Jobs Report – More NJ Residents Enter Workforce, But Economy and Personal Income Growth Below US Average
Unemployment increases by 0.2% to 3.4%
Workforce grows by 26,800 individuals, matching Great Recession level
Personal income growth lags US
Uncertainty over tax policy and weak GDP loom over coming year
According to Garden State Initiative (GSI) analysis of the newest jobs numbers issued by the Bureau of Labor Statistics, New Jersey’s unemployment rate increased by 0.2% to 3.4%, slightly below the U.S. rate, which declined to 3.5% this month. The increase was driven by an increase in the number of residents who entered the workforce. The state reported an increase of 8,000 private sector jobs in November, while shedding 800 public sector positions, for a net gain of 7,200.
“While New Jersey’s labor market typically strengthens in the Fall months, our condition relative to our neighboring competitive states is not distinguishably superior,” stated GSI’s president Regina M. Egea.
Similar weakness was found in a review of personal income data. According to analysis for GSI by Dr. Charles Steindel, former Chief Economist for the State of New Jersey, “Yesterday’s personal income release showed that New Jersey’s growth rate trailed the nation by a fair amount (2.9% vs. 3.9%; ranking 42nd) but our performance, and the Northeast in general, was weak: New York was 48th, with a 2.1% rate of growth; Connecticut was 44th, with a 2.6% rate; Massachusetts was also at 2.9% but they were ranked 41st; Delaware and DC were tops in the Northeast, both at 3.7%, but under the nation.”
Ms. Egea additionally noted, “On January 10th, the federal government will release the Q3 GDP numbers by state. Q2’s disappointing GDP number where New Jersey ranked 48th in the nation in economic growth, showed an economy lagging in our region, let alone among the continuing national expansion. With the 2-year corporate income tax surcharge enacted in 2018, beginning its sunset provision, will New Jersey remain an outlier with the highest business taxes in the US? When Governor Murphy presents his FY 2021 budget, there is also the expectation that he will continue his push to increase the sales and income taxes.”
New Jersey’s workforce increased by 26,800 individuals in November, the third consecutive month of significant gains, matching the workforce size at the time of the Great Recession in 2008. The state’s Labor Force Participation Rate increased 0.3% to 63.6%, slightly ahead of the U.S. rate of 63.2%.
Gains were recorded in five out of nine major private industry sectors, with the Hospitality (3,800) sector along with the Trade, Transportation & Utilities (3,300) sector leading sectors with gains. A loss of 1,000 positions was recorded in the Other Services sector, The Financial Activities sector gained 700 positions, but according to the most recent data available, New Jersey ranked next to last, ahead of only New York, in job losses in that sector year over year.