New Jersey’s private sector lost 9,500 jobs in the past two months and the unemployment rate ticked up from 3.7% to 3.9% according to a preliminary jobs report released Thursday morning by the New Jersey Department of Labor and Workforce Development.
That comes despite 73,300 new jobs added over the past year, 59,500 of them in the private sector — signs pointing toward a cooling job market according to economists and other analysts.
The figures come amid 11 rate hikes by the U.S central bank; a move designed to taper economic growth and curb inflation.
In September 2022, the state’s jobless rate was 2.8%, according to Federal Reserve data — though 3.9% is still a far cry from the 15.5% unemployment seen in May 2020 at the height of the COVID-19 pandemic.
The monthly jobs report is from a survey of New Jersey employers that measures the number of jobs and a survey of households that looks at the unemployment rate. It is a preliminary look that will be revised next month and again next year.
According to figures from the U.S Bureau of Labor Statistics, New Jersey lost over 730,00 jobs between February and April 2020, but regained nearly 839,000 jobs in the 37 months that followed.
The New Jersey job market seems to be slowing. Last year, it added nearly 130,000 jobs. For the first seven months of 2023, the state added 37,700 jobs.
“The economy was moving at 85 miles per hour, it shifted down to 70 miles per hour,” said James Hughes, a Rutgers professor and former dean at the university’s Edward J. Bloustein School of Planning and Public Policy. “It’s still speeding, but you’re cooling off a little bit.”
A rising unemployment rate and cooling labor market was the crux of the issue pointed out by Focus NJ — an independent research nonprofit that does work with the New Jersey Business and Industry Association, a trade group — in a mid-year report issued earlier this week.
“When economists talk about this idea of a ‘soft landing’ from inflation’ that has always been described as an environment where inflation comes down while unemployment rises slowly,” said Kyle Sullender, Focus NJ’s executive director.
“In order to get inflation under control, there’s going to be a rise in the unemployment rate, by slowing down spending and slowing down the economy,” he said. “It’s not a surprise that the state’s unemployment rate would tick up.”
Preliminary figures from the state Labor Department show that there were 4.3 million people working either in the public or private sector, compared to 4.26 million people in July last year.
There was a total job increase of 1,000 jobs last month. The increase of 8,400 jobs in the public sector offset the loss of 7,400 jobs in the private sector.
In July, New Jersey tied with its neighbor of New York for a 3.9% unemployment rate, according to preliminary federal data, and fared better than Delaware with a 4.1% unemployment rate.
Neighboring Pennsylvania had a 3.5% unemployment rate. The national unemployment rate as of July was 3.5%. It will be updated Sept. 1.
State labor officials noted in the report Thursday that the rate increased in part due to “additional residents entering the labor force.”
Typically, “if they’re looking for work, they’re counted as unemployed,” Hughes said.
“The unemployment rate going up is basically a good sign if it’s basically due to more people looking for work,” he said.
In July, construction grew by 2,400 jobs while education and health services grew by 2,100 jobs.
The same month, professional and business services shrunk by 5,400 jobs, while leisure and hospitality shrunk by 5,300 jobs.