- Q1 real GDP growth at a 1.0% annual rate, half the US average of 2.0%
- Personal income grew 5.8% fueled by a spurt in transfer payments, not growth of earnings
On June 30th, the U.S. Bureau of Economic Analysis issued its report on the Gross Domestic Product by State and Personal Income by State, 1st Quarter 2023, covering the months of January through March 2023. Dr. Charles Steindel, the former Chief Economist of the State of New Jersey, analyzed the report for the Garden State Initiative:
New Jersey’s first quarter numbers for GDP and personal income were fairly lackluster. Real GDP grew at a 1.0% annual rate, below the nation’s 2.0% figure and ranking 38th among the states. Our performance was basically comparable to other states in Northeast, but somewhat lower than our neighbors (both New York and Pennsylvania did better). State GDP is measured by summing industry contributions. No industry in New Jersey stood out as especially weak.
On the surface, the personal income numbers looked better. Our 5.8% rate of growth, though ranking 34th, beat the national 5.1% figure. Also, income growth in New Jersey was much better than New York’s 3.2%, though below Pennsylvania’s 6.7%. However, the details of our income growth were disappointing. Net earnings (employee compensation plus the profits on noncorporate business) grew at only a 4.4% rate, a bit under the 4.6% rate for the nation, and under New York (5.2%) and Pennsylvania (5.1%). New Jersey’s income numbers were boosted by an unusually large increase in transfer payments. State figures are often boosted or held back by odd shifts in transfers.
Fundamentally, these figures show that while New Jersey continues to grow, the first quarter could be viewed as trailing the nation.
