NJ’s COVID recession rebound followed neighboring states in 2021

New Jersey’s economic recovery from the COVID-19 recession has lagged most Mid-Atlantic states in 2021, despite leading the national average, according to a new report from Federal Reserve Bank of Philadelphia released Jan. 28.

The omicron variant, which hit the country in December and slowed job growth that month as the holiday shopping and travel season was in full swing, complicated job rebounds in New Jersey. .

The January 28 figures come after Murphy, in his recent State of the State Address, touted a “growing economy” emerging from the pandemic and “real progress” on that front.

Governor Phil Murphy during his second inaugural address in Trenton on January 19, 2022. - TIM LARSEN, NJ GOVERNOR'S OFFICE

Governor Phil Murphy during his second inaugural address in Trenton on January 19, 2022. – TIM LARSEN, OFFICE OF THE GOVERNOR OF NJ

He pointed to recent federal analysis that showed New Jersey’s quarterly gross domestic product placed the state in the top five for growth compared to the same quarter last year. Republicans have accused the governor of picking numbers for his speech, though such practices are not unique to any particular governor, elected official or political party.

Meanwhile, New Jersey’s infamously high cost of living has been an albatross around Democrats’ necks.

The perceived lack of focus on the issue has been blamed for the party’s loss of seven seats in the state Legislature last November and for nearly costing Gov. Phil Murphy his re-election.

Property taxes hit a new high in 2021 and are among the highest in the country. Other Garden State taxes are also high in the United States, such as the “millionaire’s tax” on income over $1 million and a top corporate tax rate of 11.5%.

The economic recovery has lagged, and the New Jersey Treasury Department is warning that the state’s good fortune in its coffers could begin to run dry starting this spring.

State leaders promise to address these issues during the new term of the legislature and Murphy.

Slow digits

Friday’s figures showed the state’s coincident index – which combines numbers such as the number of jobs added and the unemployment rate – rose 6.6% over the past 12 months, in December 2021. The national average was 6%.

Maryland’s average over the past year was 8.9%, New York’s 8.7% and Pennsylvania’s 7.3%. Only one state in the region – Delaware – was behind New Jersey, growing 5.1% in 2021.

“New Jersey’s economy is a mixed bag,” said Scott Roberts, an economist at Monmouth University in West Long Branch.

Some numbers such as declining poverty rates, growth in the state’s gross domestic product, and the presence of industries such as finance and pharmaceuticals, “which have done well during COVID,” were promising for the Garden State, he noted.

But the cost of living has been notoriously high, while the unemployment rate has declined at a much slower rate than the rest of the country, Roberts continued.

Rebounds in employment in some industries – such as leisure and hospitality – came as the holidays approached, but hiring slowed further in December, noted Siddiq Ahmed, an economist at Moody’s Analytics.

New Jersey’s employment levels rose in the last three months of 2021 and led the pack in the region, but were still lower than February 2020, before the enactment of strict business lockdown measures that intervened. the following month, notes Friday’s report.

Unemployment fell below 7% in November for the first time during the pandemic, but is still well above the 3.8% seen in February 2020. It was 6.3% in December, the third highest in the country.

The December data showed a “clear slowdown in hiring compared to the previous month, which coincided with the omicron outbreak,” Ahmed said. “The downturn was more pronounced in New Jersey compared to the national average and in some other regional states such as Pennsylvania and Maryland.”

Other customer-facing jobs, such as transportation and warehousing, were also hit in December, he added.

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