Forecast Calls For a Braking of New Jersey’s Economy
While the U.S. economy seems to be moving ahead moderately, New Jersey's economy is stuck in "slow," according to the latest Rutgers University economic forecast.
The Rutgers RECON forecast predicts a "dampening" of Jersey's gross domestic product. Rutgers economist James Hughes says for the foreseeable future, it certainly is not going to be "boom times" in New Jersey.
The state enjoyed a good economic year in 2015. But it slowed in 2016. Hughes says New Jersey job growth will be about half the pace of the rest of the nation.
"We are just about back to where we were before the recession began. But the nation recovered all of its jobs 30 months ago."
They make the point in the report that after falling rather rapidly in 2015, the state's unemployment rate reached 4.3 percent in February 2016, but it has risen somewhat since, hitting 5.3 percent in August. They also predict the jobless rate will average 4.9 percent this year, then rise to 5.4 percent in 2017.
New Jersey consumer prices rose almost imperceptibly in 2015, held back by falling gas prices. The RECON forecast says prices will rise 0.7 percent in 2016, but bounce back up to the long-run average of about 2.6 percent per year through 2026.
"Our labor force is growing slower. Our population is growing slower. And those factors really point to the economic output, or gross domestic product, of the state really moderating going forward," Hughes says.
He also says the RECON forecast touched on the uncertainty right now with a new incoming administration in Washington. Hughes says that trade policy will also impact the cost of living under President Donald Trump.
"If there is blockage of trade with China and the like, and Mexico, that means that we are not going access to those cheap products, particularly if those tariffs are put on them."
Hughes also says 400,000 New Jerseyans work in New York City. A lot of those New York City jobs are high-paying and New Jerseyans get a share of New York's growth.
"We in New Jersey are heavily dependent on suburban offices to shelter our economy, but that is not a hot sector elsewhere. The income growth looks better than simply the state itself because that represents dollar flows into the state."