New Jersey’s economic performance was weak in 2004. Employment increased by only 23,200 jobs, and, at just 0.6 percent, the state’s employment growth rate was significantly lower than the nationwide rate of 1.1 percent. This year, the state’s economy had a strong start, adding 55,000 jobs in the first quarter, com- pared with the first quarter of 2004. However, the pace of the expansion has weakened over the course of the year. The state is now expected to add only 52,500 jobs in 2005, for a growth rate of 1.3 percent; the nationwide rate will be 1.6 percent.
The state’s unemployment rate has been consistently lower than the national rate since mid-2003. However, the weakness of the state’s expansion, compared with that of the nation, has begun to show up in the unemployment rate data. The national unem- ployment rate has fallen steadily since early 2005, but the state rate rose between May and September. In January 2005, the state rate was 1.3 percentage points lower than the national rate; by September the difference was only 0.7 percentage points. In light of other information about the state’s economy, it may be that the large drop in the state’s pre- liminary unemployment rate in October was a statistical anomaly.