The state's annual revision of its employment data shows that New Jersey created more jobs in 2006 than originally reported. While welcome, this has done little to change the underlying trend of weak job growth in New Jersey.

The revised data shows that while private-sector job growth was stronger in 2006 than originally reported, it was also considerably weaker in 2005 than first reported.

New Jersey saw a net increase of 27,000 private-sector jobs in 2006, up from the original estimate of 15,900 and a gain of 0.8 percent. This is only about half of the rate of job growth seen in the nation as a whole.

However, private-sector employment in 2005 grew only half as quickly as originally estimated.  The original estimate of 42,900 has been revised downward to 23,200.

The revisions, which go back several years, also show that overall private-sector job growth in this expansion has actually been slightly weaker than originally reported.
                                    
Over the last six years, private-sector employment has seen a net increase of only 3,700 jobs, a gain of just one tenth of one percent, and 4,300 jobs fewer than initially reported.

“When you look at the revisions, it's really a wash:  2006 did better, which is welcome, but 2005 did a lot worse,” said NJBIA President Philip Kirschner said. “The bottom line is that we've created 4,300 fewer private sector jobs in this expansion than was originally reported.  Private-sector job creation has been consistently weak, and this is troubling.”

Kirschner noted that 2007 got off to a “very good start” with the addition of 6,400 private sector jobs in January (according to preliminary estimates), the biggest one-month increase since March of last year.

Between March 2003, when the current expansion got underway, and December 2006, private-sector employment grew by a total of 87,100 jobs. However, this was only 3,700 jobs more than the losses (83,400 private-sector jobs) brought on by the recession.  Thus, in December, total private-sector employment in New Jersey stood at 3,433,700, only 3,700 jobs above the pre-recession peak.

Private-sector employment also has been growing at about one-third the pace seen in the state's two previous expansions. Over the last four years, New Jersey has produced an average of about 23,200 new private-sector jobs per year.  In the 1980s and 1990s, the state was producing about 70,000 new private-sector jobs a year.  New Jersey’s rate of job growth in the current expansion also has consistently and significantly trailed the nation.

Meanwhile, the public sector has accounted for a disproportionate share of overall employment growth in New Jersey.  Expanding state and local governments added 57,800 new jobs over the last six years, a gain of nearly 10 percent.  This contrasts with the net addition of 3,700 jobs, a gain of 0.1 percent, in the private sector.

In spite of slow job growth, New Jersey's unemployment rate has fallen in recent months. The rate was a low 4.2 percent in January, down from 4.3 percent the month before and a two-and-a-half-year high of 5.3 percent in August.

Looking at some of the most significant job winners and losers over the last year (see table), the dominant service sector was up by 32,100 jobs or 1.1%.  Within that sector, the professional and business services sub-sector enjoyed the largest increase with the addition of 13,500 jobs, followed by education and health services, up 10,600.

Smaller gains were seen in the following service sub-sectors: leisure and hospitality (3,300), information services (2,200) and financial activities (1,700). 

Construction also edged up, gaining 1,500 jobs.

Declines were seen in manufacturing (-6,700) and trade, transportation, and utilities (-900).

The biggest change in the state's newly revised employment data is a downward revision in the service-sector, which created only 27,200 jobs in 2005, about half of the earlier estimate.

Employment was revised upward for manufacturing, which lost just 13,800 jobs over the last two years, fewer than the 21,200 originally reported.

Employment gains and losses for every major sector of the economy over the last six years can be seen in the table below.

This report was prepared by Christopher Biddle, NJBIA Vice President of Communications, he can be reached at 609-393-7707, ext 227.

	Return to News Center