It took a full 10 years, but it looks like New Jersey may have finally made it all the way back to the same employment level that was measured just before the Great Recession began in late 2007.
According to a new analysis of federal data by The Pew Charitable Trusts, as 2017 came to a close, New Jersey joined the ranks of U.S. states that have matched or beat their pre-recession employment levels, reaching the same 80.3 percent rate that was measured in late 2007.
The new data from Pew’s “Fiscal 50” initiative should provide some welcome tail winds for Gov. Phil Murphy as he is scheduled to deliver his first state budget message to lawmakers next week. The health of the state’s employment rolls tends to influence the stability of the state budget, including by boosting income-tax collections and other revenue sources, while also easing the demand for costly social services.
In fact, Murphy, a Democrat, could have some additional good economic news to share by the time his budget speech begins on Tuesday. The state is due to release a set of detailed “benchmarked” jobs figures on Monday, and acting Labor and Workforce Development Commissioner Robert Asaro-Angelo told lawmakers during a hearing in Trenton yesterday that he’s expecting to report there has been some improvement in New Jersey’s unemployment rate as well.
While the unemployment rate tends to get the most media attention as a measuring stick for economic performance, some economists also look very closely at the employment rate, which focuses only on those between the ages of 25 and 54. For example, the employment rate, which is an employment-to-population ratio, captures those who have quit looking for a job, while the unemployment rate does not.
“Focusing on 25- to 54-year-olds reduces the distortion of employment trends resulting from demographic effects such as older and younger workers’ choices regarding retirement or full-time education,” the Pew analysis said.
The employment rate is also a meaningful economic indicator for state policymakers because changes typically end up affecting “both sides of a state’s budget ledger,” meaning revenues and expenditures, according to the analysis.
In New Jersey, the employment rate as of the end of last year was 80.3 percent, marking a solid improvement from the 78.6 percent rate that was measured at the same time the year before, according to the Pew data. The 2017 employment rate also matched the rate that was measured by Pew in New Jersey at the end of 2007, coinciding with the onset of the Great Recession.
The recession hit New Jersey particularly hard, and as it took hold, the state’s employment rate declined by three percentage points to 77 percent at the end of 2009. It remained at that level through the end of 2011, and then reached a low point of 75.6 percent in March 2014. The rate eventually rose back to 77.6 percent by the end of 2015, and then to 78.6 percent by the end of 2016.
The improved employment rate in New Jersey put the state, at the end of 2017, above the rate measured for the entire U.S., which was 78.6 percent. And unlike New Jersey, the national employment rate was also higher when the recession began than it is now, totaling 79.9 percent in late 2007.
In all, New Jersey’s employment rate as of the end of 2017 ranked 22nd nationally, with Minnesota leading the way with a rate of 86.6 percent. New Jersey was also one of 10 states with employment rates that matched or beat their pre-recession levels as of the end of 2017, though Pew cautioned that none of the increases that were measured could be considered “statistically significant.”
The latest state and national employment figures for New Jersey seem to contradict the dynamic that played out for much of last year between the respective unemployment rates for New Jersey and the U.S. In fact, New Jersey’s unemployment rate stayed well above the national average for several months in a row, and as 2017 came to a close, the state’s unemployment rate was at 5 percent, with an estimated loss of 11,400 jobs during December. By contrast, the federal unemployment rate was just above 4 percent in December 2017, with an increase of 148,000 jobs measured at the time.
Economic indicator ‘better than expected’
The state Department of Labor and Workforce Development is due to release updated jobs data on Monday, including the annual “benchmarked” figures that are compiled with more information and analysis than monthly estimates, which are only preliminary. Asaro-Angelo said during his Senate Judiciary Committee confirmation hearing yesterday that he expects those figures to reflect a 4.6 percent unemployment rate in New Jersey.
“While there’s still room for improvement, this economic indicator is better than expected,” said Asaro-Angelo, whose nomination was later approved by the committee, advancing it to the full Senate.
A New Jersey native and Rutgers University graduate, Asaro-Angelo served as a labor official in the administration of former President Barack Obama, including as eastern regional representative.
Asaro-Angelo was nominated by Murphy to lead New Jersey’s labor department on January 9.
While taking questions from lawmakers yesterday, Asaro-Angelo highlighted the department’s efforts on workforce development and job training when he was asked how he plans to address New Jersey’s reputation for not being particularly friendly to businesses.
“I truly feel that by improving our workforce, we improve the lot for our employers as well,” Asaro-Angelo said. “When you talk about being a hostile state to employers, that’s people’s opinions, but what we hear most often when talking to employers, whether in-state or coming into the state, their biggest desire is for an educated workforce, and a workforce with the right skills.”