While the May jobs report showed a continued trend of job growth and declining unemployment in the Garden State, the gains were not quite as robust as previous months.
“New Jersey’s jobs numbers were generally positive in May, but noticeably less so than in recent months,” said Charles Steindel, former chief economist of the State of New Jersey, analyzing the report for thinktank Garden State Initiative. “The total job increase of 6,500 was certainly respectable, but less than half April’s 15,700 increase, and ended a string of eight straight months where the increase was more than 10,000.”
May marked the 18th straight month of job growth in the state, with about 96% of jobs recovered that were lost because of COVID-19 in March and April 2020, dropping to 3.9%.
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“The unemployment numbers were a bright spot,” said Steindel. “The unemployment rate fell from 4.1% to 3.9% in May, which is not greatly higher than the nation’s unchanged 3.6%. In January, New Jersey’s rate was more than a point higher than the nation’s, so there has been substantially narrowing of that gap. Just as welcome, the drop in the unemployment rate was accompanied by the strong increases in both the labor force (up 14,600) and the number of state residents working (up 22,200).”
Areas of concern in the report were found in the manufacturing and construction sectors.
“The industry composition of jobs also suggests some fraying. Most especially, both construction and manufacturing lost 1,300 jobs,” said Steindel. “The decline in construction (the third in a row) suggests that higher interest rates may be starting to have an impact.”
The strongest areas of growth were recorded in the financial activities (+2,600), education and health (+2,600), and leisure and hospitality (+2,000) sectors.
“May’s increase (and a small upward revision to April) brings the total number of jobs in New Jersey to within less than 30,000 under the February 2020 peak,” said Steindel. “Recently released information from unemployment insurance tax records suggests that the monthly figures may be underestimating the state’s job count, so the true remaining gap could well be even smaller.”
“It would seem that the state could in the near future set a new job record, but with rising fears of a slowdown – or even a recession – it may be short-lived,” Steindel added.