New Jersey’s economy continues recovering from pandemic lows

Nearly 18 months after the coronavirus pandemic led to the sudden closure of businesses and skyrocketing unemployment, New Jersey has recovered all of the private-sector jobs it lost in March and April 2020. 

New Jersey added 9,800 jobs in June as the unemployment rate remained at 3.9%, the Labor Department announced Thursday. The national unemployment rate is 3.6%. 

One year ago, New Jersey’s unemployment rate was 7.1%.

The state recovered the 702,000 private-sector jobs lost in the early months of the pandemic at a historically fast rate, economists say. 

“During the summer months, we see a lot of jobs come back, particularly with seasonal hiring, and restaurants and businesses gearing up for the year,” said Robert Scott, an economist with Monmouth University. “Generally speaking, it’s a good thing, but one of the big questions, of course, is what kind of jobs are being filled.”

Charles Steindel, formerly the chief economist for the New Jersey Treasury, analyzed the jobs report for conservative think tank Garden State Initiative and said in a statement that New Jersey’s labor force, though it continues to rebound, remains lackluster.

Despite gains in the last few months, the size of the total labor force in the state is 38,500 below last June’s figure, Steindel noted.

Economists can use monthly jobs reports as an economic indicator — and lately, Scott said, an indicator of a potential recession. Scott doesn’t find any major red flags in this month’s jobs report but said it’ll be a “duck-and-cover moment” if businesses start laying off workers.

Goldman Sachs CEO David Solomon told CNN this week he thinks the chances of a recession are high. Citigroup economists estimate a 50% probability of an economic slump. UBS puts the chances of a U.S. recession at 40%.

How things stand in New Jersey

New Jersey added jobs in five of the nine private sectors, according to the Department of Labor. Most notably, the leisure and hospitality industry — an industry among the hardest hit due to 2020 pandemic regulations — added 7,600 jobs last month.

Trade, transportation, and utilities added 4,200 jobs, while education and health services added 3,800 jobs, according to the report. Meanwhile, the construction industry, financial activities sector, and professional and business services all recorded losing jobs. 

New Jersey’s public sector added just 200 jobs last month. That industry is taking longer to recover than the private sector, Smith said, in part because hiring for positions with stronger job security and benefits can take more time.

Scott warned that he expects the summer to be a high point before a potential recession hits.

“Is this that kind of rosy point where you’re looking off the cliff and we’re about to fall off? I would say there’s a good chance,” he said. “This is a peak, and we’re going to start to see unemployment rise again as we go into the fall. I’d be shocked if that didn’t happen.”