After New Jersey lost more than 20,000 jobs during back-to-back months over the summer, there were concerns that the state’s economy was sliding backward following what had been a period of steady improvement.
But thanks to impressive job gains over the past three months, the state has more than made up for its discouraging summer, suggesting that the economy here is now in much better shape heading into 2016.
New figures released last week by the federal Bureau of Labor Statistics indicate New Jersey last month enjoyed its biggest monthly increase in employment of the year, adding 16,100 jobs. And that showing followed gains of 8,000 jobs in September and 15,500 in August, putting the state up nearly 40,000 jobs over that three-month period.
New Jersey’s unemployment rate has also dropped to 5.4 percent, now down 0.7 percent since June and a full 1 percent from October 2014. That drop came at the same time the state’s labor-participation rate remained steady, suggesting the improvement wasn’t simply a function of less people looking for jobs.
“We can now say with certainty that the New Jersey economy has turned an important corner,” said James Wooster, the state Department of Treasury’s chief economist. “The October payroll employment report is genuinely impressive.”
Still, amid the optimism of Gov. Chris Christie’s administration, others are painting a less rosy picture, noting that New Jersey’s unemployment rate, even with its recent job gains, remains higher than the national average, which is 5 percent. And with now roughly 78 percent of the jobs lost to the last recession recovered here, New Jersey’s economic performance still lags behind New York’s and Pennsylvania’s, two neighboring states that have already recovered all of the jobs they lost to the downturn while also heaping on more.
“Even though New Jersey had a good month for job growth in October, it’s clear that the Garden State’s employment situation remains fragile,” said Gordon MacInnes, president of New Jersey Policy Perspective, a liberal think based in Trenton.
To be sure, a stabilizing state economy would be good news for New Jersey residents on several fronts.
More people working typically translates into more income-tax revenue for the state budget, which means the state has an easier time paying its bills and making budget projections. And in recent years, residents here have felt the impact when Christie’s administration has missed revenue goals, with delayed property-tax relief payments, reduced contributions to the public-employee pension system, and more reliance on new borrowing for infrastructure improvements all being used as offsets when tax collections didn’t hit targets.
The reduction in the number of people looking for work can also drive up wages, increase consumer spending, and put less of a strain on state unemployment benefits and other safety-net programs.
And for Christie, a second-term Republican currently seeking the GOP’s 2016 presidential nomination, the signs of an improving state economy come at just the right time as he continues to struggle to find footing with Republican primary voters nationally.
Questions about the state’s stagnant economic recovery have dogged Christie since he officially joined the presidential race at the end of June. And Christie picked up just 3 percent support in a national Fox News poll that was released over the weekend, far behind frontrunners Donald Trump and Ben Carson.
Still, Lt. Gov. Kim Guadagno, when asked about New Jersey’s new employment number by reporters during an appearance in Atlantic City last week, pointed to private-sector job gains that now total more than 200,000 since she and Christie took office amid recession in early 2010.
“I think we’re making real progress,” said Guadagno, who has focused on economic-development issues during her tenure.
While the new federal unemployment data brought good news for New Jersey, the numbers also showed that it was one of many states to see a healthy boost in employment numbers last month as the nation as a whole gained more than 271,000 jobs.
In all, 40 states saw an improvement, paced by California, Florida, and Ohio, which added 41,200, 35,200, and 30,800 jobs, respectively. And with 54,400 jobs added since October 2014, New Jersey saw the 13th biggest jump among states since October 2014.
New Jersey was also one of 15 states to experience a full 1 percent drop in its unemployment rate since October 2014. Rhode Island saw the biggest improvement, with unemployment down 1.7 percent, followed by Michigan, with a drop of 1.6 percent.
Yet at 5.4 percent, New Jersey’s unemployment rate ranks just 35th among all states. Several neighboring states are still doing better than New Jersey, including New York, at 4.8 percent, and Connecticut, Delaware, and Pennsylvania, all at 5.1 percent.
And the latest state-revenue report released by Treasury indicated tax collections are tracking slightly behind the targets set in Christie’s $33.8 billion state budget for the current fiscal year, which ends June 30, 2016.
Tax collections are up by 2.9 percent through the first four months of the fiscal year, which began July 1, while the state is counting on growth of 3.4 percent for the full fiscal year to meet its budget targets.
MacInnes, the think-tank president, found fault in the Christie administration’s current approach to economic development, which features a heavy reliance on business-tax cuts and lucrative corporate-tax incentives. He called for more investment in schools, transportation infrastructure, and higher education instead.
“The end result is continued stress and strain on New Jersey’s low-income and middle-class families,” MacInnes said.