BUSINESS & ECONOMY

Business Report Plus: A strong start to the new year

BY Rhonda Schaffler, Correspondent |
  • The current unemployment rate for black Americans is 6.8%
  • A government report shows 148,000 new jobs were created in the U.S. in December
  • Legislation in Trenton could pave the way for attracting Amazon’s HQ2 via tax incentives.
  • NJBIA partners with Association Master Trust, a nonprofit that offers group health plans.
  • CoreLogic is projecting that home prices will continue rising in 2018 but at a slower pace
  • AAA says gas prices across the U.S. are at their highest levels since 2014.
  • The Dow Jones Industrial Average hit 25,000 for the first time.

Numbers can tell positive or negative stories, but it’s rare when one number tells both. But that is the case with one single number in the government’s monthly jobs report that came out on Friday. The number is 6.8 percent. That’s the current unemployment rate as of December 2017 for black Americans. Here’s the positive story: that number is the lowest unemployment rate for black Americans on record. The government began tracking the statistic back in 1972.

It also represents a significant drop from the peak of black unemployment, which was 16.8 percent in 2010. Here’s the negative story: black unemployment remains much higher than other unemployment for other groups. According to the U.S. Labor Department, last month the unemployment rate for whites was 3.7 percent, for Asians it was 2.5 percent and for Hispanics it was 4.9 percent. Economists say there are several reasons why minority groups experience higher unemployment rates, including an education gap. The report serves as a not so gentle reminder that even as the economy is growing, not all are benefiting equally.

That same government report showed 148,000 new jobs were created in the U.S. in December, which was below expectations. Job growth was strong in health care, but the retail sector lost jobs.

We’ve reported for some time about how retail is experiencing a retrenchment and that continues early in this new year. Both Macy’s and Sears announced more store closing and layoffs this week. Locally, the Sears in Toms River is among those that will be closing.

On Friday, legislative committees in Trenton considered bills that would pave the way to offer record tax breaks to online retailer Amazon, in order to entice the company to open a second headquarters in New Jersey. The Christie administration has said New Jersey’s economy would see a $9 billion benefit if Amazon locates HQ2 here. The left-leaning NJ Policy Perspective says the state is being too generous with those tax breaks.

New Jersey lawmakers are still mulling over possible options to mitigate any pain felt by state residents following changes to the federal tax code. One idea involves having New Jersey residents pay their local taxes by making a tax deductible charitable contribution to the state government. Other ideas included challenging the constitutionality of the new federal tax bill.

Small businesses in New Jersey could be getting a break on health care costs. This week, the New Jersey Business and Industry Association partnered with Association Master Trust, a nonprofit that offers group health plans. “The cost of healthcare was already a problem for small businesses, then came Obamacare, which re-wrote the rules for providing employee benefits, followed by the failed attempt earlier this year to repeal and replace it,” said NJBIA President and CEO Michele Siekerka in a news release. “What happens next is anyone’s guess. So in the midst of this chaos, we are proud to be able to offer our members another option.” Qualified members of NJBIA would have access to health care, dental, and prescription drug plans, along with life insurance.

The start of a new year is good time to review some statistics and look ahead to what 2018 will bring. When it comes to housing prices, New Jersey experienced a gain of 3.6 percent in 2017, according to CoreLogic. That was below the national price increase of 7 percent, year over year as of November. CoreLogic is projecting that home prices will continue rising in 2018 but at a slower pace, averaging 4.2 percent nationally. Remember of course real estate is all about location, and numbers can vary widely.

Apparently we’ll be paying more for gasoline this year. The Oil Price Information Service projects gas prices in New Jersey will hit a high of $2.90 a gallon in 2018. AAA says gas prices here and across the country has started the new year at their highest levels since 2014.

We can’t talk about numbers hitting highs without mentioning the stock market. This first week of trading in 2018 started as 2017 ended. The Dow Jones Industrial Average continues to rocket higher, and topped 25,000 for the first time ever. It’s going to be an interesting year.