BUSINESS & ECONOMY

Economist Says NJ Employment Rate Will Hinge on Improvement in National Economy

New employment numbers were released today, which offer a mixed bag for New Jersey. The Department of Labor and Workforce Development says New Jersey employers added 9,900 jobs in June, the ninth increase over the past 10 months, but the state unemployment rate jumped almost half a point to 9.6 percent. Herb Gishlick, professor of economics at Rider University, explained the new numbers in a conversation with NJ Today Managing Editor Mike Schneider.

Gishlick said the numbers come from two different data sources. The increases in jobs statistics comes from the Establishment Survey with a sample of about 5,500 businesses in New Jersey while the unemployment rate comes from a household survey and reflects those in the labor force that are actively seeking work but are unable to find it, Gishlick explained.

One reason for the increase in unemployment coupled with an increase in jobs created could be that individuals have started looking for work again. Another reason could be that New Jersey residents have lost jobs in other states. “New Jersey is part of two large metropolitan labor markets,” Gishlick said. “The northeast metropolitan New York area, including southeastern Connecticut, and the Philadelphia metropolitan area which includes a couple of counties in Delaware as well.”

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According to Gishlick, participation in the labor force at a national level has been on the decline which makes the unemployment rate better than what New Jersey is seeing. “Our labor force participation rate is about 66 percent of the labor force,” he said. “That means that in effect, people are seeking jobs as opposed to simply dropping out of the labor force not seeking a job and therefore not being part of the unemployment statistic.”

Gishlick said at some point the created jobs and unemployment rate will converge, but it might have to wait for improvement in the national economic situation. “State and regional economies are driven pretty much by what’s happening at the national level and to the degree that the national level is relatively stagnant — we’re not growing rapidly — you’re going to see that impact on most of the state and regional economies, especially in the mature urban areas such as the two of which New Jersey is part of,” he said.