Unemployment, TRANSFORMING OUR BUSINESS CLIMATE, Labor
GSI Analysis: Nov. ’20 Jobs Report: Unemployment Rate in NJ Jumps to Double-Digits as Hiring Remains Sluggish
Unemployment climbs 2.2% to 10.2% as state adds 7,100 jobs
State remains 350,000 jobs below February’s peak
Weakness in hospitality and construction as holiday sparks logistics surge
Decline in personal income reflects end of federal stimulus
On December 17th, New Jersey’s Department of Labor and Workforce Development issued the monthly jobs report for November 2020. Dr. Charles Steindel, former Chief Economist of the State of New Jersey and current Resident Scholar, Anisfield School of Business at Ramapo College, analyzed the report for the Garden State Initiative:
The pace of recovery in New Jersey was sluggish for a second straight month in November. The number of jobs rose 7,100 (9,700 in the private sector), which in normal times would be a decent monthly increase, but still leaves the state about 350,000 below February’s peak job number.
Job gains in the private sector were notably held back in two sectors. Leisure and hospitality jobs fell 6,400, most likely reflecting some impact of the resurgence in the virus (though the November numbers were collected before the recent highs in daily cases). Construction employment fell 3,200, which does appear a bit puzzling given the recent strength of the housing market, which would normally be associated with substantial boosts to renovation activity. The large trade, transportation, and utilities sector, which encompasses stores, warehouses, trucking, etc., reported a large 14,300 gain; while holiday hiring by traditional retailers has been thin, Amazon and other e-businesses have been running strong and adding workers.
The unemployment numbers were again grim-looking, with the state’s jobless rate shooting up from 8.0 percent to 10.2 percent, returning New Jersey to double-digit unemployment after a two month absence. As was the case in October, the rise in unemployment reflected a large increase in the state’s labor force: the number of state residents working rose modestly. New Jersey’s labor force has risen nearly 200,000 over the last two months (about 125,000 in November alone). It’s still, though, about 60,000 smaller than back in March.
The upsurge in the labor force can be either a bad or good sign. It’s not good that so many people have started looking for jobs the last two months and haven’t yet found them; however, the fact that people have started looking again may be a sign that they are a bit more confident about being successful in that search.
This morning’s announcement (below) by the U.S. Bureau of Economic Analysis of an 8.7% rate of decline in New Jersey’s personal income in the third quarter is much less alarming than it appears. The third quarter drop followed a record setting 40.8% growth rate in the second quarter. These wild gyrations reflect the surge of federal pandemic aid, which boosted income in the spring. As the aid fell off in the summer, New Jersey’s personal income dropped. Actually, New Jersey’s income has grown faster than the national average in each of the last three quarters. Also encouraging, “net earnings” of New Jersey residents and businesses rose at a 33% annual rate in the third quarter, keeping pace with the national average.