New Jersey added 12,900 jobs in February; jobless rate drops
New Jersey’s addition of 12,900 jobs in February, and the accompanying decline in the jobless rate, are positive signs, but just part of an economic picture that shows the state is still struggling.
Private sector employment increased by 7,100 jobs, and government employment rose by 5,800,
according to the monthly jobs report by the New Jersey Department of Labor and Workforce Development.
The two sectors together produced a monthly total that is the second highest in three years, after the December increase of 24,500, a high number that some economists believe was likely shaped by Superstorm Sandy.
Yet elsewhere, the report shows continued weakness. The state’s unemployment rate of 9.3 percent, a drop from 9.5 percent in January, is still well above the national rate of 7.7 percent.
And the report also revised the January employment figures downward by 4,800, converting a previously reported gain of 2,200 jobs to a loss of 2,600.
Joseph Seneca, a Rutgers University economist, noted that the state has added just 6,000 private sector jobs in the first two months of 2013, or about 3,000 a month.
“If continued, (that) would be a modest pace for the rest of the year,” said Seneca. “The state's labor markets are still improving, but the current pace, based on the first two months of data, remains tepid.”
The employment figures, and those used to calculate the unemployment rate, are produced from two separate surveys – one of employer payrolls and the other a household phone survey. Because they are unrelated, the two figures can provide different, sometimes conflicting, data.
Seneca and Patrick O’Keefe, director of economic research at CohnReznick, noted that the drop in the unemployment rate is not a sign of growth, because it wasn’t driven by people finding jobs - but people leaving the workforce.
While the number of people who said they were unemployed fell by 11,700, the number of people who said they were employed rose by only about 300, the figures show. Instead, the size of the labor force fell by 11,300.
“That decline, reflected the exodus of some 11,000 job seekers,” from the workforce, O’Keefe said. They left, he added, “not because they found jobs, but because they stopped looking for work,” because they were discouraged at what they saw as little chance they would be successful.
“So the unemployment rate came down for what I think most economists view as a negative reason - a discouragement rather than a rise in job holding,” he said. He called it a “positive, but mixed report.”
The figures were nevertheless touted by the administration of Governor Christie, who is running for reelection this year, and who has made job creation a top priority.
After the jobs report was released Thursday, the administration repeated its previous argument that New Jersey’s unemployment rate is higher than the nation’s because a bigger proportion of the state’s population than the nation’s considers itself part of the workforce. Christie’s aides argue that that’s because New Jerseyans are more optimistic that they will find a job.
Economists say that explanation could account for some of the elevation in the rate, but it’s unclear if it would explain it entirely.
Thursday’s report also highlighted a conflict between the rosy jobs data and another of Christie’s aims – reducing the size of state and municipal workforces. While the employment increase of 12,900 jobs backs his claim to have improved the state’s economy, about 45 percent of those jobs were in government – 3,600 in at the municipal level and 1,800 in state government.
Charles Steindel, Chief Economist for the New Jersey Department of Treasury, said in a release outlining the employment figures that “the unemployment rate is also moving in the right direction”
“This is another solid jobs report that continues the general, upward trend of growth and progress,” he said.