New Jersey’s economic recovery from the COVID-19 recession lagged behind most Mid-Atlantic states in 2021, despite leading the national average, according to a new report from the Federal Reserve Bank of Philadelphia released Jan. 28.
Complicating New Jersey’s job rebounds was the omicron variant, which hit the nation in December and slowed job growth that month as the holiday shopping and travel season was in full swing.
The Jan. 28 figures come after Murphy, in his recent state of the state address, touted a “growing economy” coming out of the pandemic, and “real progress” on that front.
He pointed to a recent federal analysis that showed New Jersey’s quarterly gross domestic product placed the state in the top five for growth compared to the same quarter last year. Republicans accused the governor of cherry picking figures for his address, though such practices are hardly unique to any particular governor, top elected official, or political party.
Meanwhile, New Jersey’s infamously high cost of living has been an albatross around Democrat’s necks.
The perceived lack of focus on the matter has been blamed for the party losing seven seats in the state Legislature last November, and for nearly costing Gov. Phil Murphy his re-election.
Property taxes hit a new high in 2021, and are among the highest in the nation. Other Garden State taxes also rank high in the U.S., such as the “millionaire’s tax” on income above $1 million and a top corporate tax rate of 11.5%.
Economic recovery has lagged, and the New Jersey Treasury Department warns that the state’s good fortunes in its coffers could begin to run low beginning this spring.
State leaders are vowing to take on these issues in the Legislature’s and Murphy’s new term.
Friday’s numbers showed the state’s coincident index – which combines figures like the number of jobs added and the unemployment rate – grew 6.6% over the past 12 months, as of December 2021. The national average was 6%.
Maryland’s average over the past year was 8.9%, New York’s was 8.7% and Pennsylvania’s was 7.3%. Only one state in the region – Delaware – was behind New Jersey, with a 5.1% growth in 2021.
“New Jersey’s economy is a mixed bag,” said Robert Scott, an economist with Monmouth University in West Long Branch.
Certain figures such as lower poverty rates, growth in the state’s gross domestic product, and the presence of such industries as finance and pharmaceuticals, “which have fared well during COVID,” were promising for the Garden State, he noted.
But the cost of living has been notoriously high, while the jobless rate has declined at a rate much slower than the rest of the country, Scott continued.
Jobs rebounds in certain industries – such as leisure and hospitality – came as the holidays approached, but hiring still slowed in December, noted Siddiq Ahmed, an economist with Moody’s Analytics.
New Jersey’s employment levels rose in the last three months of 2021 and led the pack in the region, but were still below that of February 2020, before the enactment of stringent business lockdowns that came the next month, the Friday report notes.
Unemployment fell in November to below 7% for the first time during the pandemic, but is still far above the 3.8% seen in February 2020. It was 6.3% in December–the third highest in the nation.
Data from December showed a “clear slowdown in hiring from the prior month, which coincided with the omicron outbreak,” Ahmed said. “The slowdown was more pronounced in New Jersey compared to the national average and some other regional states such as Pennsylvania and Maryland.”
Other customer-facing jobs such as transportation and warehousing also took hits in December, he added.
Editor’s note: Robert Scott was misidentified in an earlier version of this story.