Decreases in unemployment insurance applications and continuing benefits, along with a positive Bureau of Labor Statistics household report, tell Patrick O’Keefe that New Jersey’s labor market is stabilizing.
There are signs of a “marginally positive bias” to the job picture, according to O’Keefe, director of economic research for Roseland-based J.H. Cohn. According to the unemployment insurance report for the week ending Oct. 15, New Jersey had the fewest number of UI claimants in any week over the past three years. O’Keefe said UI benefit applications are a better indicator, rather than the total unemployment picture, of layoffs in a given week.
“We saw a very significant increase in resident employment over the last two months,” O’Keefe said. “When we ask households, ‘Of those who are in your household, how many have a job?’ in the past two months, there has been an increase of 34,000 in the number of employed individuals.
“Some portion of that increase reflects hires that occurred in the New York or Philadelphia labor markets, because we’re asking people whether they got a job, not whether they got a job in New Jersey. To some extent, the apparent inconsistency is explained by the fact that the state is in a regional economy and we have a regional labor market.”
But O’Keefe says despite steadiness in employment, the economic recovery in the state has yet to gain a firm grasp.
Job creation “had grown monthly from February through July, but in the last two months, it’s declined, and when we look back over the recovery, private employers’ hiring has really not gained consistent traction,” O’Keefe said, citing ups and downs throughout 2010 and 2011.
O’Keefe also said recent optimistic reports from employers in the state do not have a “tight correlation” to their actual hiring and investing practices.
“When we look at the more immediate indicators of business sentiment … the respondents have a favorable outlook for activity for the next six to 12 months, but it’s a subdued optimism,” O’Keefe said. “Employers are not sufficiently confident in the sustainability of the recovery to get ahead of the orders, or sales, or the other indicators that suggest to them where their customers will be in the future.”
“They are not pessimistic in their outlook, but they are cautious in their behavior,” he added.