New Jersey’s December unemployment rate dipped from 6.7% to 6.3% amid the holiday shopping and travel season, compared to the national average unemployment rate of 3.9% for that same month, according to the latest state and federal labor data.
While business closures and restrictions slowed the spread of the COVID-19 virus at its onset, the moves drove the unemployment rate to a record 16.6% in April 2020–up from 3.8% in March before the effects of the pandemic fully took hold of daily life.
“When you look at the U.S. average, it’s definitely behind,” said Doug Offerman, an analyst with the Wall Street rating agency Fitch Ratings. “But I think when you look at the figures from month to month you see that progress is being made.”
“They’re making slow and steady headway – would be my takeaway,” he said.
When you look at the U.S. average, it’s definitely behind. But I think when you look at the figures from month to month you see that progress is being made.
— Doug Offerman, analyst, Fitch Ratings
The numbers mark a contrast to the rosier picture the Murphy administration has painted of the state’s economic performance over the past four years and coming out of the COVID-19 recession.
During his State of the State address on Jan. 11, Gov. Phil Murphy touted a metric that suggested a definitive economic rebound: A federal analysis of New Jersey’s quarterly gross domestic product placed the state in the top five for growth compared to the same quarter last year.
As of December, the state regained 561,200 – or 78% – of jobs lost during the March and April 2020 closures. In November, that figure was 76%, which Fitch noted was “below the nation’s 82% recovery.” The average for all the states combined, as of November, was 77%, Offerman noted.
“Job losses in New Jersey, as in other states, have disproportionately affected lower-wage workers, and the job recovery for these workers has been particularly slow,” Fitch continued in its Jan. 11 report.
The state has paid out an estimated $37 billion in state and federal unemployment benefits, and to many groups not typically eligible for jobless relief such as freelancers.
In November, the state’s jobless rate fell below 7% for the first time in the COVID-19 pandemic, dropping to 6.7%.
Data show that the state added just 10,100 jobs in December 2021, compared to a net gain of nearly 26,000 jobs in November. The biggest gains in December were in leisure and hospitality, which added 3,800 jobs, followed by manufacturing, which grew by 2,700 jobs; construction, which grew by 1,900 jobs; and education and health services, which grew by 600 jobs.
Other services – those that don’t fall under the labor department’s defined categories – added 600 jobs. Financial activities added 500 jobs; trade, transportation and utilities added 100 jobs, as did professional and business services.
The information sector lost 900 jobs.
Many businesses – especially in the lower-paying jobs – have lamented their inability to lure workers, hampering their recovery from the pandemic. Dining, retail, hotels, leisure, entertainment and hospitality businesses said they were hit the hardest.
Tom Bracken, president and CEO of the New Jersey Chamber of Commerce, said that the state can add funds to the Return & Earn program, under which it provides subsidies for $500 hiring bonuses and for up to $10,000 in training wages for new hires entering a different industry.
Business owners told NJBIZ last year that they were skeptical that the added subsidies could turn the tide for many of their hiring woes. The initial hope last summer was that the end of the $300 per week federal unemployment subsidy would trigger a surge of job applicants, but such a scenario never came to pass.
