New Jersey’s economy cratered at a record-rate this spring when some of the toughest restrictions were put in place to stymie the spread of the COVID-19 pandemic.
Data released Oct. 2 from the U.S. Department of Commerce show New Jersey’s gross domestic product – the sum of goods and services produced in the state – fell by 35.6% between April 1 and June 30.
The economies of all 50 states shrank during the first quarter, just as the pandemic was taking hold across the country. Nationwide, the economy shrank by 31.4%.
The worst-hit states were Hawaii and Nevada, which both fell 42.2%, as they saw the tourism and hospitality industries dry up, including in the gambling mecca of Las Vegas.
In the middle of March, Gov. Phil Murphy issued a stay-at-home order, a ban on public gatherings and the mandated closure of businesses en masse in an effort to deprive COVID-19 of the opportunity to spread to new hosts, which have shown considerable signs of success.
As businesses like casinos, sit-down dining, hair and nail salons, gyms, malls and non-essential retail all shuttered and air travel and hotel business ground to a halt, unemployment soared to a record-high 16.8 percent in June, with 1.6 million New Jerseyans having filed for jobless benefits.
Although August had the lowest jobless rate since the start of the pandemic – at 13.8% – it still hit higher than record-high unemployment rates seen in 2018 at the height of the Great Recession.
Restrictions in New Jersey have gradually been lifted since June 15, the tail of the second quarter.
Malls and non-essential retailers were allowed to resume business, as was outdoor dining and hair and nail salons. Casinos were allowed to reopen during the July Fourth weekend. Gyms were allowed to reopen at the start of September, followed by indoor dining and theaters over Labor Day weekend. But any effect on the state economy will not be evident until data from the third quarter is released, which the commerce department has scheduled for Dec. 23.
“What weighed New Jersey down relative to other states was primarily weaknesses in health care, wholesale and retail trade, and transportation and warehousing,” former state economist Charles Steindel said in an Oct. 5 analyses for the conservative-leaning think tank Garden State Initiative. “These all clearly relate to our experiencing a firmer lockdown than most states and, additionally, to the collapse of national and international trade.”
McKoy
New York and New Jersey were both epicenters of the pandemic in March and April. In New York GDP fell 36.3 percent, according to the U.S. Commerce Department.
In the Garden State, lawmakers and financial analysts worry still that a second wave of the pandemic, or the failure of federal lawmakers to pass a new COVID-19 relief bill that could include some continuation of federal unemployment relief could further decimate the economy.
“This underscores the serious need for the federal government to provide significantly more relief to states,” Brandon McKoy, president of the progressive think tank New Jersey Policy Perspective, said in a Monday statement. “This is the only way to ensure a strong recovery that leaves no family or small business behind.”
