Focus NJ released its 2023 Mid-Year Review Tuesday reporting that unemployment in New Jersey remains near historic lows, the labor force participation rate now exceeds levels seen before the pandemic, and the state’s gross domestic product is still growing, albeit modestly.
However, the data also identifies concerning trends regarding workforce recruitment and the state’s future economic growth.
“We’ve passed the midway point of 2023 and the data raises two interesting questions,” Focus NJ Executive Director Kyle Sullender said. “Is New Jersey’s economic growth slowing and where will businesses find the workers they need at a time when the labor force participation rate is up, and the unemployment rate is low?”
New Jersey experienced an overall 2.6% increase in GDP during 2022, which ranked 13th best among all states in the nation. However, New Jersey’s GDP grew only 1% in the first quarter of 2023 while the national GDP increased 2% during the same period (the most recent quarter for which data is available).
“New Jersey’s strong overall 2022 GDP should be viewed as more significant than its recent disappointing GDP data,” Sullender said. “When the state-level GDP data for the second quarter of 2023 is released, we will know whether that 1% Q1 growth rate was a minor deviation or portends a continued slowdown in the state’s economy relative to the rest of the country,” Sullender said.
New Jersey’s unemployment rate, which was at 3.6% in May, remains near 20-year lows. The labor force participation rate, which measures the number of working-age people with jobs or actively seeking jobs, was at 65.2% in May. Juxtaposing this data with 210,000 job openings in New Jersey in May and the ongoing hiring struggles business are experiencing raises concerns.
“This data begs the question: Are there more workers who can be brought off the sidelines to fill vacant positions and what can be done to achieve that,” Sullender said.
Between December 2022 and May 2023, seven of 10 major industries in New Jersey experienced job gains, with the largest growth occurring in Education and Health Services (+20,200) which was slower than most industries to recover after the pandemic. The only industries to experience a loss of employment during that same period are Trade Transportation and Utilities; Professional and Business Services; and Other Services.
View more details in the 2023 Mid-Year Review Infographic here. For more information regarding economic indicators in New Jersey and nationwide, Focus NJ maintains a dashboard of key economic figures for all 50 states.
Article Courtesy of FocusNJ