All is not well with the New Jersey economy.  The Wall Street Journal delved into NJ’s October 2023 employment numbers and came up with a discouraging picture.  NJ’s economy underperforms the rest of the nation, plain and simple.

As shown in the chart below, NJ’s unemployment rate hit 4.6%, and increase of 1.3% from a year earlier. By comparison, the national average stood at 3.9%, which increased 02.%.

But according to Garden State Initiative (GSI), NJ’s unemployment number was even worse than it looked.  The unemployment rate is a ratio of the number of people out of work divided by the number of people in the labor force, and NJ’s labor force actually shrunk by 21,700 from September to October 2023.  Without that shrinkage in the denominator, NJ’s unemployment rate would have been 4.8%.

Likewise, GSI points out that NJ’s ratio of employed people to population fell from 62.5% to 62.2% from September to October.  Major corporations Siemens, Pfizer, Labcorp, AT&T, Qualcomm and PVH are all reducing jobs in NJ.  Given NJ’s worst-in-the-nation tax climate for businesses, we doubt they will ever come back.

According to the Journal, NJ also underperformed when it came to the total number of jobs added over the last year, NJ added 29,700 jobs, which was an increase of 0.6%, or only about 1/3 of the national average gain.  Just three sectors—healthcare and social assistance, government and leisure and hospitality—accounted for 80% of the net job gains.  In the long run, more government jobs is not a recipe for success, given NJ’s already large government sector and resulting high tax burden.

NJ has had the worst tax climate for businesses in the nation for 8 years in a row, including for every year Gov. Murphy has been governor.  Murphy has promised to let NJ’s temporary corporate tax surcharge lapse at the end of 2023, but we will see if NJ’s big-spending, Democrat-controlled legislature will comply.

NJ has significant long-term challenges, including the nation’s worst debt burden and a consistent outflow of wealth, people and businesses.  NJ needs a strong private sector to meet these challenges, but these numbers show that NJ is an underperformer.  Will our politicians do anything about it?