The economic expansion in New Jersey will continue this year and as far as we can see into the future. However, as in the rest of the nation, we expect considerably less growth in 2001 and 2002 than has been experienced in the recent past. We look for employment to increase by 40,000 jobs in 2001, but by only 19,200 in 2002. Stronger growth patterns will reassert themselves in 2003 and beyond, resulting in an average growth of more than 41,000 jobs a year between 2002 and 2005, and by an average of 43,000 thereafter (from 2005 to 2020). The R/ECON forecast for New Jersey looks for a 2.3 percent growth in real output this year, following an estimated 3.5 percent rise in 2000. Modest growth in output will continue in 2002. The economy will strengthen after 2002, with output growth averaging 2.9 percent a year from 2002 to 2005 and 3.3 percent a year over the long term. The inflation rate will be down slightly this year from the 2.9 percent experienced in 2000, but will bounce back in 2002. The annual inflation rate will average 2.6 percent from 2002 to 2005 and 2.5 percent over the next 15 years.