New Jersey‘s unemployment rate has been about the same for nearly a year — the sixth highest in the country according to recent figures — as the labor market nationally shows signs of slowing.
The fact that unemployment in New Jersey has stubbornly refused to reduce indicates that high interest rates and corporate downsizing have taken their toll on New Jersey’s economy. The Federal Reserve is currently holding rates steady and could cut them just once in 2024.
New Jersey’s economic sectors ranging from pharmaceuticals and health care to banking and finance have contracted over the past year.
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New Jersey’s unemployment rate (the percentage of people unemployed) was 4.6% in May, according to figures from the state Department of Labor.
Nationally, the unemployment rate was 4%, federal figures show. New Jersey has one of the highest unemployment rates, faring better than only the District of Columbia, California, Nevada, Washington and Illinois, according to the federal report. Bureau of Labor Statistics.
Higher-paying white-collar jobs became saturated following the COVID-19 pandemic, said James Hughes, an economist at Rutgers University.
“They didn’t want to lay off any of their employees because they knew how hard it was to staff up. They’re going to keep them,” Hughes said. “But they have given up on hiring.”
Lower-wage sectors such as leisure and hospitality, which were hit hardest during the pandemic, continued to increase hiring in 2023 and 2024. Healthcare is expected to grow as the baby boomer population age and become one of the biggest consumers in the sector, Hughes said. .
The monthly employment report is made up of an employer survey to measure the number of jobs and a household survey to measure the unemployment rate. The two sets of data do not always move in the same direction.
Businesses have been beset by difficulties hiring core staff, for one thing, said Vincent Vicari, who heads the Bergen County office of the New Jersey Small Business Development Center at Ramapo College of New Jersey in Mahwah.
“There are jobs, but unemployment is high,” Vicari said. “People don’t want the jobs that are out there. You have to go to the office, you have to show up, be present, work and smile at the customer.”
So if companies get enough staff, they won’t be able to expand and hire more because it’s difficult to access financing due to higher interest rates, Vicari added.
By the numbers
Between May 2023 and May 2024, New Jersey’s private sector grew by 69,000 jobs, although the unemployment rate increased from 4.2% to 4.6%.
Most of them were in lower-paying jobs, such as restaurants, health care and teaching, Hughes said.
Some of New Jersey’s corporate giants cut jobs last year. Union-based Bed Bath & Beyond filed for bankruptcy, closed stores and laid off more than 1,300 workers statewide. Prudential Financial laid off hundreds of workers in Newark, and Audible said in January it was laying off 62 workers in the same city.
Other companies, including Christmas Tree Shops, Rite Aid and Red Lobster, have filed for bankruptcy in the past 18 months.
Health care companies such as Bristol Myers Squibb, Novartis, Siemens and Becton Dickinson and Co. also suffered layoffs, according to documents filed with the state Department of Labor.
Similar cuts could continue this year, suggested Kevin Kim, founding CEO of the Palisades Park advertising firm Marz Agency.
Daniel Muñoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: muñozd@northjersey.com; Twitter:@danielmunoz100 and Facebook
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