During the first 10 months of 2007 New Jersey’s economy has added 22,200 jobs, or about two-thirds the number added in the same period in 2006. The state’s job growth rate so far this year—0.6 percent—was only half the nation’s, and the nation’s job growth this year has slowed by a third from 2006. We expect New Jersey to continue under performing the nation in terms of job growth next year and through 2012.
The state’s unemployment rate was consistently lower than the nation’s from mid-2003 through the end of 2005. However, starting in mid-2005 New Jersey’s rate began to rise slowly, while the U.S. rate continued to ease downward. This year the state rate has been below that of the nation, averaging 4.3 percent through November compared to 4.6 percent for the U.S. The state’s low unemployment rate is reflective of a decline in labor force participation: the unemployed are dropping out of the labor force rather than continuing to look for work. The unemployment rate is expected to top the national rate in 2008 as well as during the rest of the forecast period.
In 2007 over 70 percent of the state’s new jobs were added in its two largest private industries—education and health services and professional and business services. Most of the rest of this year’s gains were in retail trade and the public sector. As in 2006, over half the jobs lost this year were in manufacturing. The rest of this year’s losses were in transportation and ware- housing, construction, and information.