GSI Analysis: October ’23 Jobs Report – Another Lackluster New Jersey Labor Market Report

• Unemployment rate moves up to 4.6%; number of working residents continues to fall sharply.
• 21,700 fewer New Jerseyans at work in October than in September.
• Job count rises a moderate 6,600, with gains in most sectors.

Unemployment continues to rise in New Jersey, with the state’s rate going up from 4.2% in September to 4.6% in October. Particularly disheartening was a pronounced drop in the ratio of employed residents to population, from 62.5% to 62.2%–which translated to an estimate that 21,700 fewer New Jerseyans were at work in October than in September. Since July, the employment count has plunged by 50,000.

The increase in unemployment was held down by a 12,900 decline in the labor force; without that the unemployment rate in October would have been 4.8%.

The job numbers were much better, though not especially strong. There was an overall increase in payrolls of 6,600 (5,400 in the private sector), comparable to the (revised) gain in September. Manufacturing and finance were the only sectors to report losses. Professional and business services and leisure and hospitality had marked increases.

The great divergence between the unemployment and payroll reports (which are based on separate surveys) is quite hard to understand or explain. Certainly there has been noticeable slowing in the pace of job growth, and that could be reflected in a slowdown in the growth of the labor force and probably some pickup in unemployment, but the abrupt shift into reverse of the figures from the household survey (unemployment and labor) numbers appear  disproportionate. There are many technical factors (survey errors, seasonal adjustment problems) which may be at work. It is likely that as the numbers go through future rounds of revisions much of the difference will diminish, but at this time it is uncertain if  the revision will be mainly on the side of cutting the job numbers or boosting the household results.

The U.S. Bureau of Labor Statistics said that New Jersey’s September unemployment rate of 4.4% was not statistically different from the then national figure of 3.8%, given the margins of error in both. We will find out tomorrow (November 17) whether that was still the case in October.