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The basics:

• NJ added 5,600 jobs in April, according to federal labor data
• State unemployment rate fell to 4.8%
• Professional and business services led job gains
• Economists warn of labor force, sector weakness

New Jersey added 5,600 jobs in April, while the state’s unemployment rate fell to 4.8%, according to preliminary federal labor data released May 21. However, economists cautioned that signs of weakness remain beneath the surface of the labor market.

Data from the U.S. Bureau of Labor Statistics showed New Jersey’s seasonally adjusted nonfarm employment level rose to 4.38 million jobs in April. The unemployment rate declined by 0.1 percentage point from March, marking the fourth consecutive monthly drop.

The strongest monthly gains came in professional and business services, which added 5,900 jobs, followed by:

• Private education and health services +2,600
• Trade, transportation and utilities +1,100
• Manufacturing +900
• Other services +500

Losses were recorded in:

• Leisure and hospitality -3,300
• Construction -1,500
• Information -600
• Financial activities -100

Mixed broader picture

Charles Steindel, former chief economist for the State of New Jersey, said the April report showed improvement, but warned that the broader picture remains mixed.

“New Jersey’s labor market had a slight whiff of spring in April,” Steindel wrote in an analysis for the Garden State Initiative. “The state’s unemployment rate fell to 4.8%. This was the fourth straight month that the rate dropped, and it is now a fairly far cry from last summer’s peak of 5.5%. Still, there remains some gap from the national rate of 4.3%.”

Still, he noted that part of the unemployment decline was tied to a shrinking labor force. “About half the decline in unemployment in April was due to another drop (the fifth in a row) in the state’s labor force,” Steindel wrote. “It’s possible that this decline may be in part due to the change in federal immigration policy and enforcement.”

Steindel also pointed to uneven sector performance, particularly in industries reliant on immigrant labor. “There was a marked drop of 1,500 in construction and 3,300 in leisure and hospitality,” he wrote. “It’s possible that the changes in immigration are particularly evident in these sectors.”

The April gains were also tempered by downward revisions to March data. Revised estimates showed the state added 3,100 jobs in March, down from the previously reported gain of 5,800.

Looking back

Over the past year, New Jersey’s private sector added 8,500 jobs overall, driven largely by gains in private education and health services (+29,800) and professional and business services (+3,700). However, most other major sectors recorded losses over the same period, including trade, transportation and utilities (-6,100), construction (-4,900), manufacturing (-4,400), and leisure and hospitality (-4,400). The public sector lost 4,800 jobs year over year.

Steindel concluded that while April’s report was stronger than New York’s – which posted a loss of 10,600 jobs – the state’s labor market still faces challenges.

“In sum, taken in isolation the April report was on the positive side,” he wrote, “there were enough negatives to indicate that the job market is not in full bloom.”