New Jersey’s economic performance was stronger in 2005 than in the previous year, but the state’s economy greatly underperformed that of the nation in both years. Employment increased by only 23,200 jobs in 2004 and by 51,500 jobs in 2005. The state’s economy had a strong start in 2005, adding 55,000 jobs in the first quarter, compared with the first quarter of 2004. However, the pace of the expansion slowed over the course of the year. Preliminary data for January 2006 indicate a weak start for this year as well.
The state’s unemployment rate has been consis- tently lower than the national rate since mid-2003. However, the weakness of the state’s expansion, compared with that of the nation, is clearly indicated in the unemployment rate data. While the national unemployment rate has fallen steadily since early 2005, the state rate has trended up during the same period. By January 2006, the state rate was only 0.1 percentage point lower than the national rate; in December 2004, the state rate was 1.2 percentage points lower.
The R/ECON™ forecast indicates that employ- ment will grow by 0.9 percent (or 38,300 jobs) in New Jersey this year and at an average annual rate of 1 percent (or 44,200 jobs) between 2006 and 2030.Over the forecast period, the United States will also add jobs at a rate of 1 per- cent a year. Thus, over the course of this long- range forecast, New Jersey is expected to retain its current 3 percent share of the nation’s jobs. Growth in national real output was more robust than growth in state real output in 2004 and 2005, and we expect that to be the case in the next several years. However, in the longer term, from 2010 to 2030, real output in New Jersey and in the nation as a whole will expand at the same rate— 2.7 percent a year.