New Jersey’s unemployment rate has been nearly the same for almost a year — the sixth highest in the nation according to recent numbers — as nationwide the labor market shows signs of slowing down.
The fact that New Jersey's unemployment has stubbornly refused to shrink indicates that high interest rates and corporate downsizing have taken their toll on the New Jersey economy. The Federal Reserve is holding rates steady , and may cut rates just one time in 2024.
New Jersey economic sectors ranging from pharmaceuticals and health care to banking and finance have all shrunk in the past year.
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New Jersey’s unemployment rate — the percentage of people unemployed — was 4.6% in May, according to numbers from the state Labor Department.
Nationwide, 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, and tying Kentucky, according to the federal Bureau of Labor Statistics .
New Jersey's latest unemployment rate is still a far cry from the 15.4% unemployment seen in May 2020 during the COVID-19 business closures, which itself was New Jersey's highest unemployment rate since those figures were first tracked in 1976.
Higher-paying office jobs became saturated coming out of the COVID-19 pandemic, said James Hughes, an economist at Rutgers University.
"They didn't want to let any of their employees go because they knew how hard it was to build up staff. They're keeping those employees," Hughes said. "But they've given up on hiring."
Lower-paying sectors such as leisure and hospitality, which were hit harder during the pandemic, continued their hiring surges in 2023 and 2024. Health care is expected to grow as the baby boomer population ages and becomes one of the sector’s biggest consumers, Hughes said.
The monthly jobs report is made up of a survey of employers to measure the number of jobs and a survey of households to measure the unemployment rate. The two sets of data don't always move in the same direction.
Businesses have been hounded by difficulty recruiting core staff on the one hand, 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. "Folks don't want the jobs that are there. You've got to go to the office, you've got to show up, be present and work and smile to a customer."
Then if businesses do get enough staff, they can't expand and hire more because its hard to access financing due to higher interest rates, Vicari added.
By the numbers
Between May 2023 and May 2024, the private sector in New Jersey grew by 69,000 jobs, though the unemployment rate rose to 4.6% from 4.2%.
Most of those were in lower-paying jobs like restaurants, health care and teaching, Hughes said.
Some of New Jersey's corporate giants cut jobs last year. Bed Bath & Beyond, based in Union, 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 that it was laying off 62 workers in the same city.
Other companies, including the Christmas Tree Shops , Rite Aid and Red Lobster , have declared bankruptcy in the past 18 months.
Health care companies such as Bristol Myers Squibb, Novartis, Siemens and Becton Dickinson and Co. also had layoffs, according to filings with the state Labor Department.
This year, similar cuts could continue, suggested Kevin Kim, the founding chief executive officer of the Palisades Park advertising firm Marz Agency.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com ; Twitter: @danielmunoz100 and Facebook
This article originally appeared on NorthJersey.com: NJ unemployment rate 6th highest in the nation as health care, banking shed jobs
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