Monday, August 24, 2015

New Jersey loses 26,100 jobs in June and July

The next recession may have come early to the Garden State:

New Jersey lost 26,100 jobs in June and July, the state’s worst two-month loss since the spring of 2009 at the end of the recession, nearly wiping out all the gains for the year.
The figures, detailed Thursday in the state employment report for July, paint a far darker jobs picture than had been the case for the first five months of the year, when the state added jobs each month and appeared headed to a moderately healthy gain of 45,000 jobs for the year. 
Instead, the state has now added just 3,700 jobs this year, according to the report from the New Jersey Department of Labor and Workforce Development. At that rate, the state would gain just 6,500 jobs in 2015. 
The weak figures surprised economists, who could find few bright spots in the report, or explanations for the job losses. 
“It’s hot and it’s ugly,” said Charles Steindel, the state's former chief economist under Governor Christie and now a resident scholar at the Anisfield School of Business at Ramapo College of New Jersey. 
“I have no particular optimism here,” he said. “That was not a good report … We just have to face it. We have had two bad reports.”

The job losses were in several sectors of the economy:

The state’s worst performing sectors were leisure and hospitality (down 7,400 jobs), professional and business services (down 5,200 jobs) and financial activities (down 2,700 jobs). 
There were gains in the trade, transportation and utilities sector (up 4,300 jobs) and the education and health services sector (up 300 jobs). 
Hughes said the large loss in the leisure and hospitality sector might be due to the contracting of casinos in Atlantic City, or because seasonal shore hiring still hasn't recovered from hurricane Sandy. 
Professional and business services was the state's second biggest loser, and paints a disturbing picture for corporations in New Jersey. 
"Professional and business services was a big loser for two straight months, and that doesn’t have much of a seasonal factor, that’s a core sector of the economy that would suggest big corporations are not hiring in New Jersey," Hughes said.

Technically New Jersey's unemployment rate fell from 6.1% to 5.9% (which Christie will brag about), but that is because of people leaving the workforce.

This is terrible for the individuals affected, but if this is a harbinger of things to come in New Jersey - or even if the job picture is just stagnant and not negative - these job losses combined with the bear market on Wall Street ( = drops in capital gains taxes (NJ's capital gains tax is one of the highest in the country)) will translate into large revenue problems for state government.

The consequences for the state budget are clear: FY2017 will be another year NJ cannot fully fund its pensions or SFRA.

No comments:

Post a Comment