Although a solid 263,000 jobs were created nationwide in November within the context of a 3.7% unemployment rate, the US and New Jersey economies are nonetheless facing headwinds: Inflation remains high and the federal reserve’s attempts to control it by raising interest rates may be slowing the economy. Labor costs are also steep and are another factor that has contributed to employee layoffs at companies ranging from Amazon and Shopify to Netflix and Meta. And high energy prices, partly driven by the Russia-Ukraine conflict, are creating additional economic friction both in the US and abroad.
“If the [Federal Reserve] keeps raising interest rates, the probability is high that we’re going to have a weakening economy,” says economist James W. Hughes, university professor and dean emeritus of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “Whether that leads to a soft [economic] landing or an industrial-strength downturn is open to question, but I think that’s going to be the defining element of 2023.” Either way, Hughes predicts New Jersey will remain economically “in lockstep” with the nation.