New Jersey's unemployment rate surged to 8.8 percent in May, the highest level since August 1992, but private-sector job losses decelerated to their slowest pace in eight months, according to the NJ Department of Labor’s monthly employment report.

The State's private-sector employers shed 6,600 jobs in May, compared with a loss of 19,900 in April and an average of 15,300 jobs lost in each of the previous seven months.  Since February 2008, New Jersey has lost 158,600 private-sector jobs or 4.6 percent of its pre-recession total.  As of May, private-sector employment totalled 3,282,600.

Despite a slowdown in the pace of employment losses, it’s too early to say if the worst of the recession is behind us.  One month does not make a trend, and, furthermore, not all sectors of the economy did better in May.

Manufacturing had its best month in more than a year with the addition of 300 jobs.  This compares with an average loss of 3,740 jobs per month in the previous seven months.  Total manufacturing employment is now 271,700.  This is down 34,000 or 11 percent since the start of the recession. (See Table below)

The State's private-service,-producing industries lost 2,100 jobs in May, a marked improvement over an average loss of nearly 12,000 in the two preceding months.  This sector has lost 96,100 jobs, or 3.2 percent of its employment base, since the recession began, and now has total employment of 2,867,300.

Job losses have accelerated in New Jersey's third major industry sector, construction.   A loss of 4,900 jobs in May compounded a loss of 5,100 in April for a total reduction of 7.7 percent in just two months.  These are the two worst monthly job losses for an already beaten-down industry.  Since the recession got underway 16 months ago, construction has lost a net 28,600 jobs or nearly 17 percent of its pre-recession total. (The Department said increased employment in heavy and civil engineering construction, due mainly to infrastructure projects getting underway, had failed in recent months to offset an accelerating contraction in commercial and residential construction.)

In its report, the Department of Labor noted that the largest losses in the private service sector occurred in trade, transportation and utilities (-5,600), with the bulk of those losses occurring in retail.  Information services (mostly computer/software-related services) saw a loss of 1,100.  

These losses were partially offset by gains in leisure and hospitality (+5,200), where hiring was seen in accommodation and food services, and arts, recreation, and amusements.  Among other service providers, hiring was positive in automotive repair services, personal care services and business/professional organizations.

In May, New Jersey followed the national employment pattern.  While the rate of job losses slowed significantly for the nation as a whole last month, the unemployment rate continued to rise, hitting a 25-year high of 9.4 percent.

Not only is New Jersey's unemployment rate lower than the nation's, but its rate of job losses is also somewhat lower.  Since the start of the recession, New Jersey has lost 4.6 percent of its employment base (-158,600) compared with 5.4 percent (-6.26 million) for the nation.

However, New Jersey went into this recession with fewer jobs to lose.  From December 2000 through December 2007, private-sector employment in New Jersey essentially stagnated, adding just 6,800 jobs, a gain of two-tenths of one percent.  During this same period, the nation as a whole added 4.1 million private-sector jobs, a gain of 3.7 percent.

While private-sector employment was standing still in New Jersey between 2000 and 2007, the public sector (municipal, State and federal government, including schools) added 55,800 jobs for a gain of 9.4 percent. Since the start of this recession, government employment has increased by 2,700 or 0.4 percent.