The New Jersey Department of Labor and Workforce Development reported a rise in the state unemployment for the first time since December, setting a grim outlook for New Jersey residents.
According to the U.S. Bureau of Labor Statistics, New Jersey’s unemployment rate peaked at 10.3 percent in January of this year and then fell steadily to 9.6 percent in June. But July numbers rose again to 9.7 percent.
“Even though employment is up nationally, in New Jersey it has remained basically flat,” said University professor of economics and public policy Joseph Seneca. “All eyes are going to be on the national employment results that come out [today]. Without a sustained increase in aggregate demand, labor market conditions will remain weak.”
The Bureau of Economic Analysis also released its quarterly Gross Domestic Product report on Aug. 27, which indicates that the GDP only grew by 1.6 percent.
While the first quarter increase in GDP more than doubled what was reported for the second quarter, James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, explained that realistically growth GDP has been lowering because unemployment rates are rising.
“What’s been happening is growth GDP has been decelerating the last several quarters,” Hughes said. “What happened in the last recession … GDP started growing again, but employment continued to decrease for 21 months.”
He added that the number from the Bureau of Labor Statistics known as the U-6 statistics — which represents those who are unemployed but still actively searching for work, those who are unemployed and not actively looking for work and those who have been fortunate enough to find work part-time but are still looking for full-time work — is at a staggering 16.5 percent as of July.
Along with the rising unemployment rates, economists predict that New Jersey will be one of the last states in the country to recover from the recession, despite being one of the first to enter it, according to a report by The Star-Ledger.
Hughes rationalizes the slow recovery by explaining that New Jersey, over the past decade, developed a reputation for being “business unfriendly.”
“New Jersey isn’t a manufacturer state,” he said, adding that the majority of the sectors that have made a successful comeback from the recession have been those states that are manufacturer states, including New York.
Hughes said another reason for the slow recovery is that New Jersey’s unemployment rate actually declined a month after the rest of the country.
“The peak of the nation’s employment was in December 2007. New Jersey’s peak was January of 2008,” he said. “New Jersey has been lagging behind the nation for more than a decade, so that is one of the reasons to expect us to lag coming out of the recession.”
For some recent college graduates, these statistics are nothing short of discouraging.
Giuliano Messina, a University graduate student, attempted to find work in the engineering field, but had no luck.
“The difficulty lies in literally finding the work. The vast majority of openings call for people with years of experience, so sometimes it gets disheartening when you keep coming across openings for only experienced engineers,” Messina said. “You feel like you’re getting caught up in this catch-22 of ‘you need experience to get work, but you need work to get experience.’”
Seneca said the main thing that will restore confidence for New Jersey residents is to see a rise in employment above all things.
“The key issue in this economy has been and remains to be about employment,” he said. “It is job growth that will restore consumer confidence, restore the housing market, improve the business outlook and consumer spending. That has been and remains the No. 1 national economic problem.”