Latest NJ jobs report offers mixed bag

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“New Jersey’s labor market remains perplexing,” according to Charles Steindel, former chief economist of the State of New Jersey, who analyzed the state’s January jobs report for thinktank Garden State Initiative (GSI).

In data released Monday, the U.S. Bureau of Labor Statistics benchmark revisions showed stronger numbers than initial estimates for last year. That resulted in a gain of 89,600 jobs year over year in 2023 versus the original 69,600 estimate.

The revised data shows that seven of the nine major sectors experienced job growth last year. Meanwhile, the revised average annual unemployment rate was 4.4%. That was up from 3.9% in 2022, as well as above the 2023 national average of 3.6%.

As for January 2024, the jobs report showed a strong gain of 20,800 jobs. However, there was a drop in both labor force participation and employment of residents. The unemployment rate remained at 4.8%.

“January was the fifth straight month the state had a 4.8% unemployment rate. The stability reflected declines of some magnitude in both the labor force (-7,500) and the number of employed state residents (-8,400),” said Steindel. “The 4.8% unemployment rate was more than a point higher than the nation’s 3.7% figure for January, and was exceeded by only California, Nevada, and D.C.

“Within this region, New York’s rate was 4.6%, similar to ours, and Connecticut’s 4.4% was not much lower, but Delaware’s rate was 4.1%, Pennsylvania’s 3.4%, and Massachusetts’s 3%,” Steindel continued. “New York City’s rate was 5.2% — it certainly looks like there is an issue around unemployment in the metro area.”

Making gains

But Steindel said that the January jobs count shows an “utterly different picture.”

“New Jersey gained 20,800 jobs in January, which was one of the largest increases in the nation in both absolute and percentage terms,” Steindel explained. “Mining and logging (which has only 1,400 jobs in total), financial activities (-500), and leisure and hospitality (-500) had small job losses, but every other sector saw gains. Some of the increases – especially in construction (+2,400) and professional and business services (+8,900) – were probably the effect of unusually mild weather holding back normal seasonal layoffs. But all in all, it was a healthy showing.”

Trade, transportation and utilities (+2,300) and other services (+2,200) as well as the public sector (+2,300) also saw big increases.

Steindel noted a striking divergence between the two employment measures. He said the release of this latest data does not resolve that.

“Since April 2023, the count of residents employed is down nearly 40,000, while the count of jobs is up nearly 80,000,” said Steindel. “The job count figure is usually seen as more accurate, but that is not something one can take to the bank. The revisions to the job count were slightly negative for 2022 and 2023 as a whole but there was virtually no change to the figure for December 2023, and growth is now seen as a bit higher than earlier thought in the second half of last year.”

The February jobs report is due out March 21.