Job growth slows in September, but unemployment rate dips sharply

Matthew Fazelpoor//October 21, 2022

Job growth slows in September, but unemployment rate dips sharply

Matthew Fazelpoor//October 21, 2022

September’s jobs report, released Oct. 20, shows a sharp decline in the growth that the state has seen over the last several dispatches, as well as a drastic drop in the unemployment rate.

Overall, the state added just under 4,000 jobs in September.

“New Jersey’s labor market numbers in September were noticeably softer than the strong ones we have been seeing,” said Charles Steindel, former chief economist of the State of New Jersey, who analyzed the report for Garden State Initiative. “Moreover, September’s increase was entirely due to an unusually large 8,200 increase in government jobs. Private-sector jobs fell by 4,400, which marks the first decline since April 2020.”

The report also released a downward revision to August estimates, showing a 10,000 job increase instead of the 15,400 job increase initially reported for the month.

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For September, Steindel noted the drop in construction jobs.

“Perhaps the most striking loss of jobs was in construction, which was down by 2,700 (1.7%),” Steindel explained. “With the strong likelihood that homebuilding, and all other projects primarily financed by borrowing, will be under downward pressure, a quick rebound here seems unlikely. The only sector to see a particularly noticeable gain was ‘other services,’ which is a grab-bag of areas, such as maintenance and repair, personal services (e.g.: barbershops, hair salons), and charitable and social organizations.”

Two other sectors that saw dips were professional and business services (-2,700) and trade, transportation, and utilities (-1,500).

One notable aspect of the report was that the unemployment rate fell by 0.7% to 3.3% — the lowest rate since June 2019.

“September was the first month since March 2020 that New Jersey’s unemployment rate was below the nation’s,” said Steindel.

He explained that the number of residents working increased by 16,600 and, in fact, is now less than 50,000 below its pre-pandemic level, while many others left the labor force.

“[T]he labor force, which had appeared to be on an uptrend in recent months, fell 17,500, reversing most of the exceptionally large increase seen in August,” said Steindel. “About half the drop in the unemployment rate reflects the gain in employment, and half the drop in labor force.”