New Jersey continued a long-running streak of economic growth last year, but the state also added far more private-sector jobs in 2016 than original estimates, according to new figures compiled by the federal government.
In all, New Jersey added 60,800 private-sector jobs last year, more than any year since 2000. The state’s unemployment rate also dropped to 4.6 percent in January, well below the 5 percent jobless rate measured at the same time last year.
Gov. Chris Christie announced the good economic news during an event held yesterday at LG Electronics in Englewood Cliffs, where the South Korea-based company is building a new U.S. headquarters that will create more than 500 new LG jobs in New Jersey. Christie, a second-term Republican, credited his own economic policies, including a series of tax cuts enacted during his tenure, as helping to generate a string of annual job growth that began in 2010, the same year he took office.
“What you’re seeing is the effect of seven years of policies now going into effect and an improving national economy as well,” Christie said.
Another take on economy
But not everyone is agreeing with that rosy take on the state economy. Officials from New Jersey Policy Perspective, a liberal think tank based in Trenton, said the job growth in New Jersey coming out of the Great Recession still lags the nation’s despite the recent success, suggesting Christie’s policies have stymied more growth.
“New Jersey still has a very long way to go, and the best way to get there would be to shift from the current trickle-down approach to a bubble-up approach where all workers are paid enough to get by, working families don’t have to rely on private charity for the basic necessities, and everyone has a chance to thrive,” said Jon Whiten, the think tank’s vice president.
The initial federal estimates for private-sector job growth in New Jersey suggested additions were made last year, but at a very sluggish rate.
A more thorough “benchmarking” analysis by the federal Bureau of Labor Statistics indicated the state added 60,800 private-sector jobs in 2016, well above the 14,800 initially estimated. That’s the most private-sector job growth since Christie took office in early 2010, besting 2015’s total of 57,500 new jobs. It also marks the best year for new private-sector jobs in New Jersey since 2000, when the state economy added 64,500 private-sector jobs under then-Gov. Christine Todd Whitman.
In all, New Jersey has added just under 280,000 jobs from 2010 through 2016, including 7,400 in 2010; 25,800 in 2011; 44,900 in 2012; 37,600 in 2013; and 45,800 in 2014.
Monthly unemployment figures
The monthly unemployment figures that initially showed total private-sector job growth of 14,800 jobs last year are compiled by the federal Bureau of Labor Statistics based on a survey of households and employers. The benchmarking analysis that resulted in the new figures showing the addition of 60,800 private-sector jobs in 2016 incorporates a thorough review of state unemployment insurance tax records.
Aaron Fichtner, acting commissioner of the New Jersey Department of Labor and Workforce Development, said the state has much more confidence in the benchmarked data just released by BLS compared with the results of the monthly surveys, which are preliminary and subject to revision. Economists also generally warn against putting too much stock in one month’s job estimates.
Fichtner said the long-term trends in New Jersey have been “very, very encouraging.”
“We’ve come a tremendously long way,” he said.
Still, Christie, during the news conference yesterday, highlighted the initial monthly jobs figures that indicated New Jersey added 14,600 private-sector jobs in January as the unemployment rate dropped to 4.6 percent. Figures for February are not yet available, but new federal data indicated the U.S. unemployment rate was 4.7 percent last month.
Last year, Christie and lawmakers agreed on a package of new tax cuts that included a lowering of the state sales tax and a phase-out of New Jersey’s estate tax. That effort followed a series of business-tax cuts enacted during his first term, including making technical changes to the tax code to benefit small businesses and adding incentives like changing the single-sales factor formula to encourage more business investment in New Jersey.
$4.5 billion in tax cuts
Christie’s administration is estimating that all of the tax cuts will be worth $4.5 billion during the upcoming 2018 fiscal year.
The governor yesterday also credited the 2 percent limit on local property-tax increases that he and lawmakers enacted during his first year in office as helping to play a role in the state’s growing economy. And he pointed to increased home sales, lowering home-foreclosure rates and increased spending by tourists as other signs of the health of the economy.
“This didn’t happen by accident,” Christie said. “The tax cuts that we’ve put into place, holding the line on increasing other taxes, a 2 percent property tax cap, all of the things that we’ve put in place are now bearing fruit.”
But NJPP’s Whiten said the federal statistics cited by Christie also indicate overall job growth in New Jersey has been less than 1 percent since the Great Recession began at the end of 2007. By contrast, the national rate of growth is more than 5 percent over the same timeframe. Whiten also said even with the string of growth over the last several years New Jersey had only 30,200 more jobs as of January 2017 compared to December 2007.
“As the governor likes to say, ‘facts are stubborn things.’ And the stubborn fact about New Jersey’s economic recovery — even with recent positive signs — is that, yes, it still lags behind the nation and most other states,” Whiten said.
“The stubborn facts also show that New Jersey’s middle class is shrinking while poverty and income inequality remain at record levels, with more families struggling while a few at the very top get ahead,” he said.