New Jersey has been struggling through an up-and-down year for job growth in 2016, and the latest official figures released by Gov. Chris Christie’s administration yesterday showed welcome improvement after two down months.
According to preliminary estimates, New Jersey added more than 20,000 jobs during the month of June, helping to alleviate fears that the state was heading into a new downward economic cycle.
But even with those impressive gains, it remains to be seen whether New Jersey can keep the momentum going and string together several months in a row with solid job growth. That’s something that has yet to happen through the first six months of 2016. Thanks to political gridlock in Trenton over renewing the state Transportation Trust Fund, New Jersey is likely already experiencing new job losses because of an ongoing shutdown of road, bridge, and rail projects.
So the big question for the coming months is whether New Jersey can build on the job creation of June or will there be more losses in the future, possibly even self-inflicted.
“We hope this month begins a sustained trend that enhances New Jersey’s business climate and enables us to achieve fiscal stability,” said Tom Bracken, the president and chief executive of the New Jersey Chamber of Commerce.
Economists warn against putting too much stock in monthly job reports because they are based on surveys and are frequently subject to revision. Instead, they recommend making evaluations based on long-term trends. So far this year, the monthly job reports have been largely up and down, making it difficult to spot a trend.
There were job losses in January and February, then big gains in March, followed by more losses in April and May. The preliminary figures released by the state yesterday for June showed more gains, including the addition of 22,200 private-sector jobs. If that number holds through the revision process, June will have been New Jersey’s best month for private-sector job growth in the last 20 years.
“The employment gains in June are very strong,” said James Wooster, chief economist for the state Department of Treasury. “It’s hard to beat the biggest single private-sector job creation month since 1996.”
In all, the state’s preliminary figure for job-growth in June was 20,300 thanks to the loss of an estimated 1,900 public-sector jobs, according to the state report, which is based on data provided by the federal Bureau of Labor Statistics. Also playing a role was the likely return of thousands of Verizon workers last month after going on strike earlier this year.
Still, if the new numbers hold up, they would mean the state has added nearly 18,000 jobs since the start of the year, and nearly 70,000 since this time last year.
Although the state’s unemployment rate went up from 4.9 percent to 5.1 percent in June, its high point for the year, Wooster said that isn’t necessarily a bad thing. The unemployment rate compares those with jobs to the people in New Jersey who are looking for jobs, and the rate can go up even when there’s job growth if the labor pool also increases. Right now, the state’s labor-participation rate is 64.2 percent, which is better than the national rate of 62.7 percent, suggesting New Jersey residents have more confidence in the state’s job market.
“With the New Jersey economy continuing to add jobs, the unemployment rate will decline again,” Wooster said.
But Bracken, the Chamber of Commerce leader, pointed to the lack of compromise in Trenton on the TTF issue as a remaining economic concern.
Christie and Democratic legislative leaders agree that the state should increase the gas tax by 23 cents to renew the TTF for at least another eight years. However, they remain deadlocked on tax cuts that Christie and other Republicans are seeking to help offset the impact of the hike, leading to a stalemate that is now grinding construction work to a halt.
Christie favors pairing the gas-tax increase with a one percentage point reduction in the sales tax, while Senate President Stephen Sweeney (D-Gloucester) prefers phasing out the estate tax and making a number of more modest tax cuts. Sweeney said he’s concerned that cutting the sales tax, which has won the support of Assembly Speaker Vince Prieto (D-Hudson), would take too much money, an estimated $1.6 billion, out of the state budget.
So while Christie and Sweeney remain at odds, hundreds of road, bridge, and rail projects across the state have been shut down to preserve the trust fund’s remaining resources for essential projects and emergencies. Industry experts have estimated the shutdown will affect 1,700 construction jobs and another 1,500 in other industries.
Bracken said the transportation-funding issue right now creates a “unique opportunity.”
“We can either seize it by adopting a robust solution and accelerate our economic recovery, or we can face potentially devastating consequences resulting from further inaction or a timid solution,” he said.