GSI Analysis: July ’23 Jobs Report – Poor Showing for New Jersey Labor Market in July, June Revised to a Loss

• Unemployment rate climbs to 3.9% versus 3.5% U.S. average
• Sharp drop of 7,300 private sector jobs in July
• June jobs numbers revised downward to show a loss of 4,200 jobs
• Small gain in jobs in July entirely the result of a pickup in government

On August 17th, New Jersey’s Department of Labor and Workforce Development issued the monthly jobs report  for July 2023. Dr. Charles Steindel, former Chief Economist of the State of New Jersey, analyzed the report for the Garden State Initiative:

July was a poor month for New Jersey’s labor market. The total job count rose by a meager 1,000, but this was the result of an unusual 8,300 increase in public-sector employment (possibly due to a combination of some odd timing of summer job hiring and end of school year layoffs). Private-sector employment fell a sharp 7,300. While construction jobs rose 2,300, and education and health gained 2,100, the results in other sectors were dismal, with professional and business services down 5,400 and leisure and hospitality—which had not reached its pre-pandemic peak—down 5,300.

Adding to the glum news, the job figure for June was revised down by 4,200. The downward revision was almost entirely in professional and business services.

The household survey numbers were also disappointing. The unemployment rate moved up from 3.7% to 3.9%. It seems quite possible that the difference from the national rate of 3.5% will be judged to be statistically significant (that information will be available tomorrow, with the release of the July figures for all states). Most of the increase in unemployment reflects another noticeable gain in the labor force—7,400, which was, however, noticeably smaller than any month in the first half of the year—only trivially offset by a very small increase of 900 in the number of state residents at work.

The national numbers have in recent months shown some slowdown in job growth. The deceleration has been more marked here in New Jersey. To be sure, it’s difficult to adjust for normal seasonal movements in employment during the summer months, and that problem could be worse here than in some other parts of the nation. For instance, before seasonal adjustment, leisure and hospitality jobs rose 2,400, but the estimate was that a 7,700 increase was needed to keep the adjusted count stable. Nevertheless, the combination of the widespread pattern of job losses in private sectors, the downward revision to June, and the rise in unemployment, is disquieting.

The U.S. Bureau of Labor Statistics will issue its monthly “State Employment and Unemployment” report on Friday, August 18th, which offers a comparison of how New Jersey is faring relative to other states. In last month’s release, covering the month of June, New Jersey ranked 39^th in the nation.