The increase of COVID-19 throughout the country could short-circuit New Jersey’s economic recovery, which began to rebound in May and June, according to a new Rutgers report.
“Virus containment is the crucial factor that will sustain the pace of economic recovery,” said James Hughes, a professor and dean emeritus of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University-New Brunswick, in a prepared statement.
“Recent nationwide increases in the rate of new infections are creating fears of an economic fizzle and dampening the nation’s and New Jersey’s outlook for the rest of the year,” he said.
Hughes co-authored the report, titled “Coronavirus Economic Rebound: Bucking New Headwinds.”
Recent nationwide increases in the rate of new infections are creating fears of an economic fizzle and dampening the nation’s and New Jersey’s outlook for the rest of the year.
— James Hughes, professor and dean emeritus, Edward J. Bloustein School of Planning and Public Policy at Rutgers University-New Brunswick
New Jersey followed April’s record job losses with record gains in May and June: By June’s end, New Jersey had gained 130,900 jobs, one-quarter of the total lost before the COVID-19 shutdown – about 536,400 fewer jobs in the state and 13.4 million nationwide, according to the report.
Despite New Jersey’s efforts to suppress the virus, nationwide failure to do so could produce longer-term economic damage by increasing the likelihood of more widespread business contractions and bankruptcies, and depressing future investment, Hughes and fellow researchers found.
Private sector firms in New Jersey are already planned for a long, slow recovery, which could result in more job losses during the second half of 2020, he said.
“The nationwide surge in new coronavirus cases that started in mid-June has cast doubt on the sustainability of this job-growth momentum and has added new volatility to the economic outlook. Expectations of a return to ‘normality’ have been dashed,” he said.
The report is the third in a series of Fast Track Research Notes, published by the Rutgers Center for Advanced Infrastructure and Transportation on the pandemic’s economic fallout. The reports’ authors are Joseph Seneca, professor emeritus and distinguished professor of economics emeritus; Hughes; and Connie Hughes, former chief of management and policy in the New Jersey governor’s office.
A fourth report in the series, to be released the week of Aug. 24, will examine whether recent data reflects the prediction that the strong employment recovery of May and June has begun to abate due to nationwide surges in COVID-19.l