We Ask Economist: How Long Will it Take NJ to Make a Comeback?
As the New Jersey restart continues, the state added almost 131,000 new jobs in June, the greatest single job growth month in the history of the Garden State.
Combined with the bounce-back in May, New Jersey has had an employment increase of about 220,000, which means the state has recovered about 26% of the jobs lost in March and April when the COVID-19 pandemic roared to life.
The state’s unemployment rate rose by 1.2% last month to 16.6%, the highest since the Great Depression.
According to Rutgers University economics professor James Hughes, the jobs increase since May is a positive trend but the state needs to recover 74% more in order to get back to February levels.
"It is a deep hole. We have a long way to climb out of that hole," he said.
He said the job growth trend in some sectors of the economy is expected to continue but overall “it’s possible for it to stall out."
"I think there’s increasing recognition that unless we control the coronavirus there’s really going to be headwinds facing us in terms of job growth," he said.
Hughes noted we are slowly recovering many of the jobs lost in the shutdown, including some of those in retail and hospitality businesses.
“The question is whether the financial difficulties of other firms and companies will cause them to do traditional layoffs going forward.”
He said one example of this is United Airlines, which has announced it will probably eliminate half of its U.S. workforce in October because of the dramatic decline in air travel.
Hughes said as the recovery continues, we can expect an uneven pattern with certain sectors coming back and others going under.
“We do have permanent long-term damage with firms going out of business,” he said. “Of big firms having to cut back because of their own financial losses.”
Job losses nationally in March and April wiped out a full 10 years of job growth. In New Jersey, the job losses in March and April were double that.
“From February of 2010 to February of 2020, New Jersey added about 400,000 jobs,” he said. “But in March and April we lost over 800,000 jobs, so we were set back much deeper than the nation.”
He said the jobless rate in New Jersey and the nation is expected to bounce around for quite a while because it’s affected by people technically returning to the workforce if they start looking for employment as things begin to improve.