A new ADP report released Wednesday shows the nation added 175,000 private sector jobs in January, a weaker figure than prior months, blamed partly on bad weather.
Economists interviewed said they don't expect the softer performance to derail growth in 2014 nationwide or in New Jersey. Roseland-based payroll data company ADP's report for January reveals a drop compared with November and December, which averaged 258,000 new jobs a month.
Moody's Analytics chief economist Mark Zandi said the decline is not reason for worry, noting the January figure is similar to the average growth of 183,000 jobs a month in 2013, which adds up to more than 2 million jobs annually.
He expects growth to accelerate as the year progresses. "Underlying job growth, abstracting from the weather, remains sturdy," Zandi said. "Gains are broad based across industries and company sizes, the biggest exception being manufacturing, which shed jobs, but that is not expected to continue."
Zandi expects growth to bust out of its current range and move toward 225,000 jobs a month by year's end, a level representing more robust expansion partly aided by a recovering housing market. "I do expect things to pick up," Zandi said. "I expect a fair chunk of that to be housing related, including construction and manufacturing. I think you'll also see a pickup in retail because people will need some home improvement, as well as professional services, like landscaping."
Rutgers economics professor James Hughes said he expects New Jersey to grow with the nation, if somewhat slower, because its housing sector is also showing signs of life. He referenced growth in multi-family homes, especially along the Hudson River waterfront. Hughes also expects a better year for post-Hurricane Sandy reconstruction than 2013."We've got tailwinds now, so that should push us forward," said Hughes, a dean at the Edward J. Bloustein School of Planning and Public Policy.
Hughes said that certain sectors are slowing in New Jersey, particularly financial services and telecommunications, which is coping with the decline in landline customers. New Jersey job growth will likely lag parts of the country benefiting from technology booms, like Texas, as well as states benefiting from natural gas extraction, he said.New Jersey's unemployment of 7.3 percent trails the national average of 6.7 percent.
Zandi expects national unemployment to fall toward 6 percent in 2014, though some of that drop will result from declining labor force participation. He said wage growth isn't strong enough to lure discouraged job searchers plus the aging of the work force points toward a smaller actively working population.
Also in the ADP report:
Small business, or those employing less than 50 workers, posted the biggest chunk of job growth in January, adding 75,000 jobs. Large businesses, those that employ 500 or more, added 34,000 jobs. Medium-sized businesses added 66,000.
Most sectors adding jobs were service providers, the largest gain coming from professional and business services at 49,000. Trade/transportation and utilities added 30,000 jobs while construction added 25,000 jobs. Manufacturing lost 12,000 jobs.