the staff of the Ridgewood blog
Trenton NJ, New Jersey’s unemployment rate has remained nearly unchanged for almost a year, now ranking as the sixth highest in the nation, according to recent data. As the national labor market shows signs of slowing down, high interest rates and corporate downsizing have left their mark on the state’s economy. The Federal Reserve is holding rates steady and may cut rates just once in 2024.
Key economic sectors in New Jersey, including pharmaceuticals, health care, banking, and finance, have contracted over the past year. The state’s unemployment rate stood at 4.6% in May, according to the state Labor Department, while the nationwide rate was 4%. Only the District of Columbia, California, Nevada, Washington, and Illinois have higher unemployment rates, with New Jersey tying with Kentucky, as per the federal Bureau of Labor Statistics.
Although the current rate is far lower than the peak of 15.4% in May 2020 during COVID-19 business closures, it highlights ongoing challenges. Economist James Hughes of Rutgers University notes that high-paying office jobs have become saturated since the pandemic. Companies are hesitant to let go of employees due to previous staffing difficulties, leading to a hiring freeze.
Lower-paying sectors like leisure, hospitality, and health care have seen hiring surges in 2023 and 2024. As the baby boomer population ages, health care is expected to continue growing.
The monthly jobs report, which includes employer surveys measuring job numbers and household surveys measuring the unemployment rate, often shows differing trends. Vincent Vicari, head of the Bergen County office of the New Jersey Small Business Development Center at Ramapo College, emphasizes that while jobs are available, high unemployment persists because many people are unwilling to take the jobs offered, which often require in-person attendance and customer interaction. Additionally, businesses face challenges expanding due to high interest rates making financing difficult.
By the Numbers:
- Between May 2023 and May 2024, New Jersey’s private sector added 69,000 jobs, despite the unemployment rate rising to 4.6% from 4.2%.
- Most new jobs were in lower-paying sectors like restaurants, health care, and teaching.
- Corporate giants such as Bed Bath & Beyond, Prudential Financial, and Audible have cut jobs, with Bed Bath & Beyond filing for bankruptcy and laying off over 1,300 workers statewide.
- Other companies, including the Christmas Tree Shops, Rite Aid, and Red Lobster, have declared bankruptcy in the past 18 months.
- Health care companies like Bristol Myers Squibb, Novartis, Siemens, and Becton Dickinson and Co. have also seen layoffs.
Kevin Kim, CEO of Marz Agency in Palisades Park, suggests that similar job cuts could continue this year, reflecting the ongoing economic challenges in New Jersey.
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