The state still has not recouped the losses suffered earlier this year and last year, despite modest gains in jobs and work force in recent months.
In the latter half of 2017 and the beginning of 2018 New Jersey’s economy has not kept pace with our national economy which is growing at a steady clip.
Garden State Initiative (GSI) analysis of October’s monthly jobs report showed positive gains for the Garden State economy across the board and marked the fourth consecutive month of job and workforce growth for the state. Over the longer term however, New Jersey’s labor force is still near its lowest levels in years with some industry sectors suffering compared to neighboring and competing states.
“Any month where the state added jobs and expanded the workforce is a good month for the economy,” said GSI President Regina M. Egea. “But New Jersey is still in a vulnerable position compared to its neighbors and the national economy.
The report showed New Jersey’s labor force growing by 5,200 residents in October. Employment grew by 8,200 residents in October and the number of unemployed residents fell by 3,000. This caused the unemployment rate to fall to 4.1 percent, a .1 percent drop from last month. The survey showed a jump of 18,200 new private sector jobs compared to last month. This is the largest spike of single-month job growth so far in 2018 for the state.
New Jersey Labor Force
October marked the fourth consecutive month of growth for New Jersey’s labor force. This was desperately needed news considering that for the latter part of 2017 and the start of 2018, New Jersey’s labor force lost residents for eleven months straight. The state’s labor force is comprised of the number of people actively employed as well as the number of people who are unemployed but actively looking for work.
Four months of consecutive growth hopefully shows that the labor force growth could have some sustained power. However, even though New Jersey’s labor force is growing at a steady clip, it is still smaller by 22,600 residents than it was this time last year, and it’s smaller than the state’s average labor force levels in 2008.
Until recently, New Jersey’s labor force has also been at odds with the national labor force trend. The strong national economy has led the U.S. workforce to grow by more than 5 million residents since 2015. But New Jersey’s labor force has lost more than 50,000 residents in that same period. With New Jersey’s workforce struggling while national economic gains helped boost employment nationwide, the Garden State economy could be in a vulnerable position if the country suffers a recession in the near future.
New Jersey jobs
While New Jersey’s labor force has struggled over the last year, the state’s jobs numbers have grown at a steady pace. This month New Jersey saw the largest spike in job gains over the past year. The state now has 68,500 more private sector jobs than October 2017.
Most New Jersey sector trends line up with industry trends in neighboring and competing states. However, New Jersey’s “Construction” and “Financial Activities” sectors have suffered losses over the past year while growing in most other neighboring states.
According to data from September 2018 (the most recent data available for all state’s being discussed), New Jersey has 9,600 fewer construction jobs compared to September 2017 and 2,500 fewer jobs in the Financial Activities sector compared to September 2017*. New Jersey is the only state to suffer losses in construction and financial services compared to the neighboring and competing states of New York, Ohio, Pennsylvania, North Carolina, Connecticut and Florida.
Industry trends can differ significantly from state to state, but having two major industries in New Jersey be in such stark contrast to other nearby and similar states could potentially signal larger economic issues for the state.
New Jersey growing but economy still vulnerable
October’s economic report was welcome news for the Garden State. But New Jersey is still recovering from the labor force losses it suffered while the national workforce was growing and the national economy was performing at record levels.
With sustained growth at current levels, New Jersey would eventually recoup the losses over the past year and potentially grow the state economy to new levels. Hopefully New Jersey’s labor force and job growth continue to improve over the coming months. But in order to maintain any momentum through potential challenges, the growth will need to increase substantially.
*New Jersey added 1,800 construction jobs in October 2018 and lost 700 financial activities jobs in October 2018. The state is still down jobs over the year in both sectors.