New Jersey won’t return to its pre-recession job levels until late 2017 — nearly a decade after the decline began — according to an economic forecast released today by Rutgers University.
New Jersey is on pace to add more than 58,000 nonagricultural jobs this year, a 1.5 percent growth rate surpassing the 1.3 percent rate in 2012. But since September 2010, New Jersey has recovered only slightly more than half its lost jobs while the U.S. recouped 83 percent of the 8.7 million jobs lost nationally.
“The state’s economic outlook is improving in some respects, but generally, it trails the nation’s,” Rutgers economist Nancy H. Mantell said in a release Wednesday before the semiannual Rutgers Economic Advisory Service (R/ECON) subscriber conference.
Mantell, R/ECON’s director, was joined by Dean James W. Hughes and economist and University Professor Joseph J. Seneca, both from Rutgers’ Edward J. Bloustein School of Planning and Public Policy, at the conference.
Mantell offered short- and long-term predictions about New Jersey’s economy, while Hughes concentrated on ongoing changes to the commercial real estate landscape and Seneca addressed national economic trends.
According to R/ECON, New Jersey’s predicted annual rate of growth is just 0.8 percent in 2014 and 0.7 percent through 2033. If that holds true, New Jersey will reach its employment peak of 4.09 million jobs achieved in January 2008 by late 2017.
“In terms of real output, the state’s economy will grow at an average rate of 2.2 percent per year between 2012 and 2033, about 15 percent slower than the average rate expected nationwide,” Mantell said.
Mantell cited a number of reasons as contributors to the lower real gross state product (RGSP), including:
• the relatively high costs of living and doing business in New Jersey;
• the lower proportion of working-age people;
• the shift in industrial composition ever more heavily into the service economy;
• the projected slower average annual increase in population growth in New Jersey.
Mantell acknowledged that the state’s unemployment picture appears to be improving.
“Our unemployment rate as of last October was 8.4 percent, and we anticipate it to fall to 5.3 percent by the end of the forecast period,” she said. “Even though New Jersey’s rate has fallen substantially in the past year, from an average of 9.5 percent, it is still more than one percentage point higher than the national figure, and it will remain at least a bit higher through 2033.
“More worrisome than the comparison between the state and national statistics is that much of the decline in New Jersey’s unemployment rate has come from a decrease in labor force participation rather than from an increase in resident employment.”