New Jersey enjoyed a third year of strong economic growth in 1999 after a four-year period during which it pulled slowly out of the recession of the early 1990s. We expect growth to continue this year, although at a slower pace, as the economy adjusts to more inflation and higher interest rates. The R/ECON forecast for New Jersey looks for employment to rise in 2000 by 55,900 jobs, or 1.4%, with growth in real output of 2.4% and inflation at 2.9%. The state’s population will increase by 0.6% in 2000 and grow at an average rate of 0.6% a year over the forecast period. New Jersey enjoyed a third year of strong economic growth in 1999 after a four-year period during which it pulled slowly out of the recession of the early 1990s. We expect growth to continue this year, although at a slower pace, as the economy adjusts to more inflation and higher interest rates. The R/ECON forecast for New Jersey looks for employment to rise in 2000 by 55,900 jobs, or 1.4%, with growth in real output of 2.4% and inflation at 2.9%. The state’s population will increase by 0.6% in 2000 and grow at an average rate of 0.6% a year over the forecast period. The services and trade sectors will provide 90% of the net increase in employment over the forecast period. The fastest growth will occur in the communications and services sectors. Declines in the manufacturing sector will slow from -2.7% per year over the past two decades to an average of -0.5% per year during the forecast period. The structure of the economy will thus continue to shift away from reliance on manufacturing and toward dependence on services. (See Chart 1.) By 2020, only 9% of the state’s job basewill be in manufacturing, down from more than 25% in 1980 and 12% in 1999. The service sector will provide 40% of the state’s jobs, up from 20% in 1980 and 33% in 1999. The public sector’s share of the job base will also continue to decline significantly over the forecast period